Broadcast networks sue Locast for illegally streaming local channels
posted Friday Aug 2, 2019 by Scott Ertz
A few years ago, a unique company popped up, offering the ability to stream live TV over the internet. While that concept is far from novel, Aereo was streaming directly from local TV antennas, giving people access to local programming from markets they were not in. This was really popular for sports fans who lived in different markets, such as our former host who used it to watch Giants games when they were blacked out in Tampa. The company was sued, eventually losing a Supreme Court case, inevitably ending their operations in 2015.
It is unusual for someone to attempt to revive a business model that has been deemed illegal by the highest court in the land, but that is exactly what non-profile Locast has done. The difference is that Locast offers the service for free, assumedly hoping that the lack of charge would prevent the legal challenge that ended Aereo's dreams. That has absolutely not been the case, as the organization has been sued by, well, everyone. A lawsuit filed by ABC, CBS, Fox, and NBC asks that Locast be shutdown and financial damages be awarded. With a Supreme Court case in their favor, it seems likely to go that way. According to the lawsuit,
Locast captures over-the-air broadcast signals, strips critical data from those signals, and then retransmits those signals, and the copyrighted content that they carry, to registered users over the Internet. The catch is, unlike licensed cable, satellite, and streaming services, Locast neither obtains Plaintiffs' permission nor pays for its exploitation of Plaintiffs' exclusive rights to publicly perform their copyrighted content. Instead, Locast simply takes Plaintiffs' copyrighted content and retransmits it to its registered users at will over the Internet.
Local networks receive a lot of money from cable, satellite, and streaming licensing deals. In fact, the amount could have been as high as $10 billion in 2018 alone. A service like Locast undermines that aspect of their business, which is how the brands can afford to continue operations. It is no surprise, however, that the organization in question is financially backed by AT&T, who owns DirecTV. The organization is also founded by Dish Network lobbyist. The non-profit status of the organization gives them some new ground on which to fight, but the resources of the 4 big media companies will make it a challenge. The fact that the organization has such ties to Dish and DirecTV won't help either,
These two for-profit businesses (AT&T and Dish) provide Locast with valuable nationwide distribution of the Locast app on the Internet-connected set-top boxes of their subscribers. At the same time, Locast provides these two major distributors with commercial benefits that include the ability (a) to avoid obtaining retransmission consent from local stations to include local stations in their pay-TV offerings by integrating the Locast app into their customers' set-top boxes; (b) to gain leverage in negotiations with broadcast stations over retransmission consent rights to offer their subscribers access to broadcast channels; and (c) for Dish, to promote a version of its Sling TV Internet television service that does not carry local broadcast channels by telling potential customers that they can "supplement" Sling TV by getting the broadcast channels via Locast. Locast is not the noncommercial, community public service it purports to be. It is a strategic play funded by and functioning for the benefit of decidedly commercial interests.
Those ties will certainly be called into question and the bypass of an official Act of Congress almost certainly will prevent Locast from winning this fight.