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ABC, CBS, Fox, NBC sue small streaming-TV startup Locast

The battles lines are drawn.

Broadcasters are suing Locast, a TV streaming startup.. 
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The four big broadcasters in the US -- Disney's ABC, CBS, Fox and Comcast's NBCUniversal -- are suing a small, nonprofit streaming service, called Locast, which grabs over-the-air channels and makes them available to stream. The Locast service is available in 13 cities, including New York, San Francisco and Los Angeles. 

The suit is the first attack against a company that many see as a successor to Aereo, a for-profit streaming service that offered consumers livestreams of broadcast channels for a paid monthly subscription five years ago. That came at the height of broadcasters' anxiety about cord-cutting and consumers forsaking them for streaming services, and in 2014 the Supreme Court ruled that Aereo was illegal, leading to its demise. 

One difference between the cases, however, is Locast's nonprofit status. US copyright law has allowed certain nonprofit institutions to grab over-the-air TV signals and retransmit them to nonpaying viewers, such as a university setting up an antenna that can retransmit to students in its dorms. Aereo, as a for-profit company, used a different, technological loophole when it argued its service was legal. 

A lawyer for Locast, David Hosp, said in a statement to CNET that Locast is providing a public service by retransmitting the broadcasters' free, over-the-air broadcasts. 

"Its activities are expressly permitted under the Copyright Act," he said, referring to the 1976 law and its exemption for nonprofits that boost local broadcast signals. "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."

The broadcasters, which are claiming copyright infringement, say Locast will cause them "irreparable injury that cannot fully be compensated or measured in money" unless it's stopped by the courts, according to their filing Wednesday in US District Court for the Southern District of New York. The programmers are also suing Locast's leader, David Goodfriend. 

"Locast is simply Aereo 2.0, a business built on illegally using broadcaster content," Gerson Zweifach, the broadcasters' lawyer, said in statement to CNET. "While it pretends to be a public service without any commercial purpose, Locast's marketing and deep connections to AT&T and DISH make clear that it exists to serve its pay-TV patrons."

AT&T, which owns major pay-TV distributor DirecTV, recently donated $500,000 to Locast and planned to add Locast to its DirecTV and U-Verse set-top boxes. Dish, meanwhile, is making Locast a default app suggested on its new AirTV players.

AT&T has also recommended that its customers use Locast while CBS is dark on its services. CBS and AT&T are in the second week of a blackout of the network's channels with the two companies reached a stalemate over retransmission fees that CBS charges AT&T. (Editor's note: CBS is the parent company of CNET.)

"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," Zweifach said in the statement. "We are confident that like Aereo before it, Locast will be found in violation of the law and shut down."

Originally published July 31, 10:45 a.m. PT.
Update, 11:55 a.m.: Adds Locast response.

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