Now AT&T is putting money into Locast with an announcement on Thursday the country’s largest telecommunications company made a $500,000 donation recently to Locast’s parent company, the Sports Fans Coalition of New York (SFCNY).
Locast offers video streams of major broadcast affiliates in several markets, including New York, Chicago and San Francisco, as well as two communities in South Dakota. The service offers local stations in those markets that air programming from ABC, NBC, CBS, FOX, the CW, PBS and other terrestrial networks.
The service is similar to Aereo, a streaming TV service that was forced to shut down in 2014 following a lawsuit. Like traditional pay TV companies, Aereo charged a fee for customers to access the streams.
But Aereo didn’t reach carriage agreements with broadcasters, angering programmers who accused the service of pirating television content. A coalition of broadcasters led by Disney-owned ABC sued Aereo in a federal case that reached the Supreme Court. The top court ruled against Aereo; the company shut down and sold its remaining assets to TiVo a short time later.
Locast also operates without carriage agreements — but also doesn’t charge customers to view the TV channels it carries. Instead, Locast asks for users to make donations of at least $5 a month to continue supporting the service. Asking users to donate money, but not requiring them to pay to watch streams, exploits a loophole in the Copyright Act that allows not-for-profit companies to redistribute broadcast stations to users.
AT&T is the first pay TV company to integrate Locast into its legacy pay TV hardware. An article published Thursday by the website Fierce Video speculated AT&T may pivot to offering only Locast for local channels thanks in part to the expense of carriage agreements for broadcast networks.
“The integration, coupled with the new donation, could be viewed as a move by AT&T to gain more leverage in carriage negotiations with broadcasters and television station groups,” the article said. “If stations go dark on either U-verse or DirecTV due to impasses over retransmission consent agreements, AT&T can point to Locast as another option for allowing its subscribers to continue receiving local broadcast channels.