Nonprofit TV Service Locast Accuses Big Four Broadcasters Of Collusion

from the dysfunction-junction dept

Locast, a New York based nonprofit that offers viewers access to over-the-air (OTA) broadcasts via the internet, has accused the big four broadcast networks of colluding to restrict consumer access to those broadcasts. As we noted recently, Locast was custom built to test the copyright legal minefiled created in the wake of the Aereo ruling, which made made numerous dubious assumptions and provided zero guidance for companies that wanted to enter the space but comply with the law. Enter former FCC lawyer and media executive David Goodfriend, who effectively created Locast specifically in the hopes the industry would sue.

Last month Goodfriend got his wish, with ABC, CBS, Comcast/NBC, and Fox all filing suit, claiming the video nonprofit (which currently offers the service in 13 markets) is "illegally using broadcaster content." Locast in turn has now responded in a court filing (pdf), alleging that the broadcast networks have unfairly colluded to restrict public access to OTA broadcasts:

Plaintiffs have colluded to limit the reasonable public access to the over-the-air signals that they are statutorily required to make available for free, and have opted instead to use their copyrights improperly to construct and protect a pay-TV model that forces consumers to forgo over-the-air programming or to pay cable, satellite, and online providers for access to programming that was intended to be free. A large portion of the fees paid by the public is then handed over to Plaintiffs in the form of retransmission consent fees.

Broadcast TV networks are available using both an inexpensive antenna and airwaves that are technically owned by the public. But, given broadcast networks collected $10.1 billion in retransmission fees for these channels in 2018 from cable TV operators looking to include them in their cable lineups, they're obviously not keen on outfits looking to disrupt their profitable, existing models. Locast currently streams these channels in 13 markets but doesn't charge users for access, only taking donations as a nonprofit. Its lawyers say the existing broadcast model is little more than a complicated con:

This is classic copyright abuse. By limiting access to the over-the-air signals that Plaintiffs have committed to make freely available, and simultaneously using the copyrights in their programming to drive revenue for the local programming that consumers cannot now effectively receive over the air through their pay-TV model, Plaintiffs have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The payTV providers get rich. Plaintiffs get rich. The public gets fleeced.

In addition to engaging in what Locast's lawyers call a "a sham copyright infringement claim," they state that the broadcast networks have been working in concert to threaten retaliation against any additional partners beyond AT&T and Dish:

Plaintiffs’ bad faith litigation is part of a broader coordinated campaign to undermine Defendants’ business dealings and chill financial support among potential donors, including with direct threats of retaliation or baseless litigation against them. These threats have harmed competition and will continue to do so until stopped by this Court.

The broadcasters' lawsuit was filed in US District Court for the Southern District of New York against Sports Fans Coalition New York (SFCNY), the organization that technically runs Locast. The broadcasters continue to argue that the outfit is not only illegal, but that it's not eligible for non-profit status because it's funded, in part, by Dish and AT&T, two companies both trying to make inroads in the streaming TV space.

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Filed Under: antitrust, collusion, competition, copyright, david goodfriend, tv

Companies: locast