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Broadcasters call Locast 'ruse' to aid AT&T, DISH in heated retrans spats

U.S. broadcasters are crying foul over streaming service Locast, claiming it provides unauthorized access to their content while benefiting operators DISH Network Corp. and AT&T Inc., which are embroiled in contentious carriage disputes with the station owners.

In a July 31 lawsuit filed against Locast, CBS Corp., Walt Disney Co., NBCUniversal Media LLC and Fox Corp. pointed to the advantages the streaming service affords DISH and AT&T in retransmission-consent negotiations and the upper hand it gives the operators over other virtual providers.

With the Locast app installed on AT&T and DISH internet-connected set-top boxes, the lawsuit contends Locast helps the distributors include stations in their pay TV offerings without having to obtain retransmission consent. The plaintiffs also allege that Locast gives DISH an advantage in promoting its Sling TV streaming service over virtual competitors, such as Hulu LLC's live TV offering, YouTube TV and Sony Corp.'s PlayStation Vue, by telling consumers they can supplement their lower-cost service with Locast's free offering.

Locast bowed in 2018 and currently operates in 13 larger cities, including New York, Los Angeles, Chicago and Houston. The service was founded by David Goodfriend, head of Sports Fan Coalition, who formerly worked for DISH and went on to lobby for DISH on retransmission-consent issues. The lawsuit claims that Locast was funded in part through a loan from another ex-DISH executive and that AT&T also recently donated $500,000 to Locast.

According to the suit, Locast also retransmits the broadcast signals after removing vital information, such as codes by used Nielsen Holdings PLC to measure ratings. The plaintiffs are seeking damages and injunctive relief for alleged copyright infringement.

SNL Image Locast donation screen

For its part, Locast maintains it complies with the 1976 Copyright Act, which allows nonprofits to operate so-called booster and translator services that strengthen a TV station's signal to reach antennas that otherwise would not receive the channel. Locast, though available for free in the cities where it operates, solicits donations from users to help with costs related to equipment, bandwidth and operational support.

"Locast is an independent, nonprofit organization that provides a public service retransmitting free over-the-air broadcasts. Its activities are expressly permitted under the Copyright Act," said David Hosp, a lawyer at Orrick Herrington and Sutcliffe who is representing Locast. "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."

Cable operators and other multichannel video programming distributors engage in retransmission consent negotiations with broadcasters in order to carry broadcast content also available for free to consumers via antennas. AT&T is currently engaged in a retrans dispute with CBS, which has left the programmer's owned stations dark to AT&T's DIRECTV, DIRECTV NOW and U-verse subscribers. AT&T has been directing customers to Locast to watch the content in the interim. In another disconnect tied to failed retransmission-consent negotiations, more than 120 Nexstar Media Group Inc. stations have been unavailable to DIRECTV and U-verse customers since early July.

DISH and broadcaster Meredith Corp. have been at a similar impasse for a couple of weeks, with 17 stations in 12 markets remaining off of the satellite provider's air.

Though they are not parties to the suit, AT&T and DISH did respond to the litigation against Locast with their own statements.

A DISH spokesperson maintained the company has no more ties to Locast than it does with over-the-air antennas.

"But we continue to believe consumers deserve a choice when it comes to how they receive their local broadcast channels, whether through satellite retransmission, over-the-air antennas or through other legal means," the spokesperson said.

AT&T said: "Locast offers consumers an innovative new way to access free over-the-air signals. We support technologies that give consumers more choices and better access to this local content."

Aereo, a similar streaming service whose backers included IAC/InterActiveCorp Chairman Barry Diller, was shut down after an unfavorable Supreme Court ruling in 2014. Another service, FilmOn, also sought to offer an alternative means to access broadcast content but was hobbled by an appeals court ruling in 2017.

Dennis Wharton, a spokesman for the National Association of Broadcasters, said Locast is "thinly disguised as a not-for-profit entity that mirrors failed predecessors Aereo and FilmOn in its bid to legitimize the theft of local TV broadcast signals." Wharton said NAB is "confident the courts will see through the AT&T/Dish/Locast ruse and uphold the integrity of U.S. copyright laws that sustain the economic viability of local broadcasting."