Locast Founder To Pay $32 Million To Settle Lawsuit By Big Four Broadcasters

The founder of Locast, a non-profit determined by a federal judge to have improperly distributed broadcast TV network signals, has agreed to pay $32 million to settle a lawsuit.

The settlement (read it here) is a straightforward capstone of the case. In addition to the financial penalty, it enjoins defendant David Goodfriend from participating in any similar action that could be viewed as a copyright threat.

ViacomCBS, Disney, NBCUniversal and Fox sued Locast in 2019. The case had distinct echoes of the Aereo affair. Backed by Barry Diller, Aereo defended its digital alternative to pay-TV all the way to the Supreme Court before being torpedoed by an unfavorable ruling.

Goodfriend, a veteran attorney, founded the non-profit parent of Locast in early 2018. He was familiar with the legal and business workings of pay-TV and streaming, having worked in the Clinton Administration, at the FCC and Dish Network, among other places. Locast, he always maintained, was allow to relay broadcast signals at no charge by accepting donations at a lower level than its cost of operations. That “fair use” is permitted by the Copyright Act, proponents said. They felt they were merely applying new technology to an age-old behavior protected since the dawn of the TV medium: plugging in a TV and pulling broadcast signals out of the air at no cost.

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In a ruling earlier this year, though, a federal judge determined that Locast had been taking in more money from donations than it spent on operations. It also interrupted programming to urge viewers to pay for a higher tier of service, at which they wouldn’t be bothered with such messages. On September 2, the company said it was suspending operations.

At issue with the entire Locast affair, of course, was the billions of dollars in retransmission consent revenue reaped by major media companies. Even in the current streaming-obsessed era, traditional powers were unwilling to overlook a threat to that still-meaningful and recurring stream of proceeds.

Representatives of Goodfriend did not immediately issue any response to the ruling or reply to Deadline’s request for comment on the settlement.

Even as it faced a dire legal threat over the past two years, Locast continued to add markets and expand into new parts of the U.S. By the time it was forced to suspend operations, it was available in about 55% of households through streaming distribution hubs like Roku and Amazon. Pay-TV operators like Dish and DirecTV also enabled Locast, and executives like Dish chairman Charlie Ergen sometimes invoked it as a solution for frustrated viewers inconvenienced by carriage fights.

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