OTT Translator Service Launch Comes with Broadcaster Red Flags

The nonprofit Sports Fans Coalition (SFC) launched an over-the-top translator service in the New York area Thursday that aims to allow watching live streams of local broadcasters online. But broadcast experts see the Locast.org service raising copyright, retransmission consent and programming contract questions. "We are kind of in uncharted territory," said SFC founder David Goodfriend, a lobbyist and lawyer. "I'm not naive enough to think" there won't possibly be legal challenges, he said.

“Over the years, numerous services from Aereo to FilmOn have tried to find creative ways to skirt the communications and copyright laws that protect local broadcasters and our tens of millions of viewers," NAB spokesman Dennis Wharton said. Without more details, Locast.org "sounds like the latest such effort," he said. "We are deeply skeptical that this service will survive legal scrutiny where its predecessors have failed.” The service sounds similar to the Aereo effort, agreed Michael Couzens, vice president-legal affairs, National Translator Association (NTA), but added he didn't know enough details. "I'm all for getting new services to the public" as long as they are legal, Couzens said.

The service -- the effort of SFC's newly founded New York chapter -- collects 14 full-power local broadcast stations' live linear broadcasts and streams them to viewers' web browsers or to a Roku or Android app, Goodfriend said. He said the content, offered 24/7, is streamed over a content delivery network that geo-codes so it can't be viewed outside the New York City designated market area. There's no DVR functionality or skipping in the streaming service, he said: "It's just a dumb pipe."

He said the service is allowed under the Copyright Act's exception that allows nonprofits and government agencies to retransmit broadcast signals if they charge a fee only to cover costs and don't benefit financially. "It doesn't say retransmit over the air; it just says retransmit," Goodfriend said. "The advent of the internet has certainly brought havoc on copyright law in the United States," said Jim McDonald, NTA president-emeritus, who said it remains to be seen whether Goodfriend's legal premise for starting the service is workable.

The aim is to restore the public interest mission of broadcasting by ensuring cord cutters can get local broadcast signals even without digital antennas, or on their smartphones, Goodfriend said. In markets like New York City, over-the-air reception can be spotty because of the skyline, Goodfriend said. SFC "has always stood for the proposition this programming should be available to the public ... as inexpensively as possible," he said.

If the service succeeds, "lots of markets ... and nonprofits should try it," he said. Success, he said, will be judged on whether the service still in operation with enough donors to cover its costs, Goodfriend said: "This stuff does cost money."

Locast.org "is good for consumer choice, and helps ensure that broadcasters fulfill their public interest mandate," Public Knowledge said. "We're glad to see someone stepping up to make free, over-the-air broadcast programming more accessible to viewers." It said the Aereo decision made clear that online retransmissions of broadcast programming are subject to copyright law in the same way as MVPD retransmissions are and that Section 111 of the Copyright Act makes clear that nonprofits can retransmit broadcast programming to the public on a free, public service basis. "Congress created this provision with the expectation that services like Locast would take advantage of it," said PK Senior Policy Counsel Phillip Berenbroick, a board member of SFC New York.

Geographic distribution limitations "are a big problem for broadcasters" since their contracts for network and syndicated content usually restrict distribution outside the DMA, said broadcast lawyer Peter Tannenwald of Fletcher Heald. That issue goes beyond compulsory copyright license law and "and is likely to be governed by program contracts as much as anything else," he said.

Broadcast lawyer Jack Goodman said if Locast.com is an MVPD, there isn't a nonprofit exception to the need to get retransmission consent. He said that issue, raised in the Supreme Court's Aereo case (see 1406260026), was never resolved and likely would come up with Locast.org.

Broadcast lawyers said one potential problem is the efficacy of restricting the viewing to the DMA. "Historically, it has been difficult, if not impossible, to restrict Internet viewing to within the DMA," which is why cable companies often limit streaming to home networks, Tannenwald said. If geotargeting works, it should remove some obstacles to streaming broadcast signals, he said, but some program and network agreements restrict all streaming so as to avoid having to define what constitutes adequate geotargeting.

Goodfriend said the Locast.org setup cost "hundreds of thousands of dollars," with some expenses, like the content delivery network, scalable depending on how many users there are. He said much of the startup funding came from “a high net worth individual."

SFC has frequently opposed media consolidation deals like Sinclair/Tribune (see 1708150063) and Charter/Time Warner Cable/Bright House Networks (see 1602240030), and opposed relaxed media ownership rules (see 1711150054).