Free TV Services in Danger As TV Networks Sue NPO
Major TV Networks such as ABC, CBS, Fox, and NBC filed a lawsuit against a Nonprofit Organization (NPO) Locust which provides free online access to broadcasting stations. These broadcast networks have done so seeking financial damages and a permanent statement that would close Locast. The TV networks are generally freely available over the air and can be accessed using an antenna. But broadcasting networks have made a business out of it using retransmission consent and right to retransmit.
In the year 2018 alone, broadcasting networks reportedly collected 10.1 billion USD via retransmission fees which apply to satellite and cable networks. Further, cable and satellite networks collected this from consumers as broadcast TV fees. Locast, an NPO acts a,s a digital translator i.e. it acts like a traditional broadcast service but, instead of using regular over-the-air method to boost signal it streams it via the internet. Consumers can further access it using the internet and enjoy free TV. This will largely impact the TV networks market as they won’t be able to generate revenue from retransmission fees. And if such digital transmitters increase, then the TV networks might be at a loss.
To stop this, major TV networks filed a lawsuit against Locast seeking financial damages and a permanent injunction that would shut Locast down. If successful, other players will not enter the market. Locast is an NPO and carries out operations via donations. But, the TV networks claim that its money is bankrolled from the satellite TV industry as AT&T donated 500,000 USD to Locast and the founder has ties with dish Networks. The Locast Founder, Mr. Goodfriend, had said in an interview with the New York Times in January way before the lawsuit that he will be ready to fight. According to Mr. Goodfriend, they are functioning within the law and are not doing anything wrong. If Locast wins this lawsuit, it will open the gate for free TV services. And, if the network services win, the consumer will continue paying extra charges as retransmission fees.