ABC, CBS, Fox and NBC Sue Over Locast, a Free Streaming App

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On Wednesday, the major broadcasters filed a copyright lawsuit targeting Locast, a much-hyped digital app that streams over-the-air television stations. The lawsuit against Locast, which recently earned a $500,000 donation from AT&T, figures to become a follow-up to the Supreme Court's Aereo decision in 2014 and could influence the future of cord-cutting.

Gerson Zweifach, a partner at Williams & Connolly representing ABC, CBS, Fox and NBC in the lawsuit, commented about the filing, "Locast is simply Aereo 2.0, a business built on illegally using broadcaster content.... We are confident that like Aereo before it, Locast will be found in violation of the law and shut down."

Locast was founded by David Goodfriend, a former Dish executive who also once worked at the Federal Communications Commission. Since launching last year, Locast has attracted tens of thousands of users, mostly folks who have canceled cable service and are looking to supplement streaming subscriptions with local stations delivering news and live sports. Goodfriend had been basically daring major broadcasters to sue. He along with the Sports Fans Coalition are hoping a court will bless his service based on an exemption in the 1976 Copyright Act adopted to support nonprofit services.

The broadcasters, though, insist upon the necessity of a license to retransmit copyrighted television programming. Otherwise, such retransmission of content violates their public performance rights, they say.

In Aereo, regarding a Barry Diller funded streaming precursor, the Supreme Court likened that service to a cable operator and agreed that consent was needed.

Now, upon months of speculation whether the broadcasters would go after Locast in court and risk publicizing the upstart app by doing so, the broadcasters target Goodfriend's argument that his tech service is exempt from copyright liability.

"Locast is nothing like the local booster services contemplated by Congress in creating this narrow exemption," states the complaint filed in New York federal court. "Locast is not a public service devoted to viewers whose reception is affected by tall buildings. Nor is Locast acting for the benefit of consumers who, according to Locast when promoting its purportedly free service, 'pay too much.' Locast is not the Robin Hood of television; instead, Locast’s founding, funding, and operations reveal its decidedly commercial purposes."

The complaint (read in full here) then continues, "There is nothing local about Locast.... Nor is Locast in any respect limited to enhancing the local reception of over-the-air broadcast signals. Defendants’ Locast service allows registered users to access Plaintiffs’ copyrighted programming via Internet-connected devices, including television sets, laptops, smartphones, and tablets. Defendants stream Plaintiffs’ programming over the internet twenty-four hours a day, every day, without authorization, potentially to anyone in the world with an internet connection. And unlike legitimate booster and translator stations, Locast does not have the permission of the broadcast stations it retransmits, in New York or anywhere else."

The plaintiffs insist that Locast is operating for commercial benefit and devaluing their retransmission consent rights. Those rights return billions of dollars from cable and satellite companies despite local stations being available to anyone with an antenna. 

While Locast aims to be the digital equivalent of an antenna by only serving up local programming to its users, the broadcasters smell foul play from Locast's association with a Dish executive and its recent influx of cash from AT&T. As the complaint puts it, "That is why certain pay-TV distributors have played an increasing role in creating, sustaining, and expanding Locast."

The defendants have reacted to the lawsuit with a statement:

"Locast is an independent, non-profit organization that provides a public service retransmitting free over-the-air broadcasts. Its activities are expressly permitted under the Copyright Act. The fact that no broadcasters have previously filed suit for more than a year and a half suggests that they recognize this. We look forward to defending the claims—and the public’s right to receive transmissions broadcast over the airwaves—in the litigation.”