America’s four major broadcast networks joined forces on Wednesday to sue a little-known nonprofit organization that streams television signals at no charge, arguing that the service should be shut down for copyright violations and for failing to compensate them.
The service, Locast, started last year and is available through a free app that relays broadcast feeds online. It has more than 200,000 users in 13 cities, including Chicago, Los Angeles, New York, San Francisco and Washington.
The networks, ABC, CBS, NBC and Fox, say in their complaint that Locast is eating into the licensing fees they get from pay-television companies like the cable operator Comcast and the satellite-TV provider Dish that carry the networks’ programs and sports events. The networks are expected to receive more than $10 billion in such fees this year.
“A rogue streaming service skirting the law for the benefit of telecom giants does nothing but threaten the very investments in content that consumers value,” the networks say in the complaint, which was filed in the Federal District Court in Manhattan.
David Goodfriend, a lawyer and law professor who worked in the Clinton administration, introduced Locast in New York in January 2018. He said he had started the service specifically to challenge the broadcasters’ interpretation of the country’s copyright law.
“We really did our homework,” he said in an interview in January. “We are operating under parameters that are designed to be compliant within the law.”
[Read more about Locast its founder.]
Under federal law, broadcast stations must provide their signals free to the public, making networks like those that sued Locast easily available through the use of an antenna. But broadcasters won a provision in copyright law in the 1990s that required pay-TV providers like Comcast and Dish to negotiate what are known as retransmission-consent fees to carry those signals.
Locast argues that its service complies with copyright law because as a nonprofit entity, it is allowed to act as a so-called signal booster for the broadcasters’ programming.
David Hosp, a lawyer for Locast, said in a statement that it “provides a public service retransmitting free over-the-air broadcasts,” which is “expressly permitted under the Copyright Act.”
Locast is a nonprofit organization, but it has ties to companies that must pay licensing fees to the networks. In addition to his time in government, Mr. Goodfriend is a former executive at Dish, which has long chafed at having to pay the broadcast fees. Although Locast relies on donations from viewers, it also accepts money from corporations and recently received $500,000 from the telecommunications giant AT&T.
AT&T is locked in a fee dispute with CBS that has resulted in the network being blacked out since July 20 for more than 6.5 million of AT&T’s television subscribers. AT&T has encouraged its users to try Locast during the blackout.
The networks’ lawsuit is in some ways similar to an earlier legal battle they waged against Aereo, a start-up backed by the media tycoon Barry Diller. Aereo captured over-the-air TV signals and streamed them to subscribers for a monthly fee but did not pay the networks anything. Mr. Diller lost the legal challenge in 2014 when the Supreme Court ruled that Aereo had violated copyright laws, prompting the service to shut down.
Locast’s roots are in the Aereo case, which Mr. Goodfriend taught at Georgetown University. He wanted to show how the ruling might affect the public interest.
“I had to teach them that more often than not, it’s through huge stakeholders battling it out that change happens,” Mr. Goodfriend said in January. “There should be something that challenges the broadcasters.”