Nonprofit TV streamer vs. networks

A complicated new TV drama is debuting in federal court.

The country’s four largest television networks sued online streaming service Locast on Wednesday in Manhattan Federal Court, claiming the nonprofit is violating the networks’ copyrights by streaming their broadcasts free.

Locast contends that under the law it’s permitted to stream material from ABC, CBS, NBC and Fox because it’s a registered nonprofit.

“Its activities are expressly permitted under the Copyright Act,” said Locast lawyer David Hosp in a statement posted on Twitter. “The fact that no broadcasters have previously filed suit for more than a year and a half suggests that they recognize this.”

The broadcasting brouhaha has big bucks riding on it.

To broadcast TV programs, satellite television service providers such as Dish and AT&T-owned DirecTV pay TV stations, which in turn pay their parent networks. Over the past decade these fees have skyrocketed, with the total jumping to $11 billion projected in 2019 from less than $1 billion in 2009.

The four networks claim in their lawsuit that Locast is acting in coordination with satellite television service providers to undermine that business model, which in recent years has led to more disputes between the providers and networks, as well as blacked-out channels.

The American Television Alliance estimates that since 2010 there have been more than 1,000 blackouts, with the number spiking to 230 this year, up from 165 in 2018.

In their court filing, the four networks accuse Locast and its “patrons” Dish and AT&T of trying to circumvent payments through the free streaming service.

Both AT&T and Dish have integrated Locast into its services. AT&T donated $500,000 to Locast in June. And the nonprofit’s founder is David Goodfriend, a former Dish executive and lobbyist.

The networks’ lawsuit claims Locast seed money came from a former Dish bigwig.