Locast, a non-profit streaming service, has countersued Disney (DIS)’s ABC, CBS (CBS), Fox and Comcast (CCZ)’s NBCUniversal, alleging the broadcasters engaged in antitrust conduct and colluded to grow their market power.
Locast streams content from ABC, NBC, Fox and CBS through its app without users having to rely on a home antenna. The service is free to users and is available in 13 cities, including New York, Washington and Los Angeles. The broadcasters have taken issue with this and joined together in July to sue Locast for copyright violations. Their lawsuit named Locast founder David Goodfriend and his non-profit advocacy group, Sports Fans Coalition NY, Inc., which operates the service as the defendants.
Locast denied the allegation in its countersuit filed on Thursday in the Federal District Court of Manhattan, citing its distinction as a non-profit. Goodfriend launched Locast in January 2018 within a non-profit entity, which the case argues, grants it the legal right to rebroadcast local stations without receiving a copyright license from broadcast networks.
“Plaintiffs have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The pay TV providers get rich. Plaintiffs get rich. The public gets fleeced,” the lawsuit read.
Locast’s lawsuit used YouTube TV as an example of a company affected by the networks’ alleged collusion. The case cites an April meeting between executives at YouTube TV, Google’s paid streaming service, and Locast. The YouTube executives allegedly said if YouTube TV provided access to Locast, YouTube TV would be “punished by the Big 4 broadcasters in negotiating carriage agreements for other non-broadcast programming channels,” the lawsuit read.
AT&T, the parent company of WarnerMedia, which owns CNN, added Locast to DirecTV and U-Verse in May. In June, AT&T donated $500,000 to Sports Fans Coalition to “support SFCNY’s mission to make free broadcast content available to consumers and offer them more choice,” the company said in a release.
CBS declined to comment on the lawsuit. An NBCUniversal spokesperson directed CNN Business to a representative for the broadcasters in the lawsuit. ABC and Fox did not immediately respond to CNN Business’ request for comment. Google and AT&T, who are not part of the lawsuit, also did not resond.
Gerson Zweifach of Williams & Connolly, representing the broadcasters, said, “We trust the courts to see right through this façade and recognize Locast for what it is – not a public service organization, but a creature of certain pay-TV interests with an entirely commercial agenda.”
Goodfriend is an attorney who served in government as an aide in the Clinton administration and as an adviser to Federal Communication Commissioner, Susan Ness. He later worked at DISH Network. Earlier this year, in an interview with the New York Times, Goodfriend said he welcomed a lawsuit from the networks. CNN Business has reached out to him for comment.
This isn’t the first time a streaming service has fought against the networks. Aereo previously provided streams of TV channels for a monthly subscription without paying broadcasters. But in 2014, the Supreme Court ruled the service as illegal, citing copyright law.