Philadelphia is joining New York, Chicago, Dallas, Boston, Houston, and Denver as the latest city to get free streaming of local, over-the-air TV stations from an innovative non-profit “digital translator” service.

Locast began streaming 15 local Philadelphia broadcasters on Monday, viewable on computers and portable devices including Roku, laptops, smartphones, and tablets.

Locast Philadelphia Lineup (Partial)

• 2 — KJWP Wilmington, Del./Philadelphia (MeTV)
• 3 — KYW Philadelphia (CBS)
• 6 — WPVI Philadelphia (ABC)
• 10 –WCAU Philadelphia (NBC)
• 12 — WHYY Wilmington, Del. (PBS)
• 17 — WPHL Philadelphia (MyTV)
• 29 — WTXF Philadelphia (FOX)
• 57 — WPSG Philadelphia (CW)
• Unknown Station
• 65 — WUVP Vineland, N.J. (Univision)
• 69 — WFMZ Allentown (Ind.)

So far, Locast has survived while services like Aereo have not, because it is was designed to exploit a loophole in the Copyright Act of 1976.

Under Title 17, Chapter 1, section 111 (a)(5) of the Act, Locast is legal because the law exempts anyone who offers a “secondary transmission not made by a cable system but is made by a governmental body, or other nonprofit organization, without any purpose of direct or indirect commercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service,” from having to get permission from the stations involved.

David Goodfriend, a Washington, D.C. attorney and founder of Locast, may only have legal exposure if a court determines the law was intended to cover translator television broadcasting, not online streaming. But so far, broadcasters and their lobbying groups, including the National Association of Broadcasters, have surprisingly ignored Locast and its gradual expansion.

Because the service is offered free of charge, Locast accepts voluntary contributions from viewers who use and appreciate the service. Goodfriend keeps costs down by leasing space on an affordable building’s roof, places a traditional TV antenna on it, and then contracts with a local internet service provider to distribute the signals over the internet. To remain legal, Locast asks to verify all of its viewers’ locations, and only permits viewing inside a covered city’s reception area.

Locast founder David Goodfriend recently appeared on Cheddar to discuss Locast and how it can be an ally for traditional TV broadcasters. (5:49)

The Fire TV Recast DVR is among several new products Amazon is preparing to release for this year’s holiday shopping season, and it was a runaway favorite for Amazon-watchers given a preview of Amazon’s newest products last week.

The Recast is designed to appeal to cord-cutters who miss their cable-TV DVR box. Amazon’s TV recording solution is strictly designed to record over-the-air/free TV broadcasts, and won’t work with satellite, telco, or cable television. Oddly, it does work with one streaming cable-TV alternative: PlayStation Vue, but for the most part, Recast will make sense if you spend a lot of time watching and recording local TV stations. In larger cities, this means the ability to record 35-50 different stations and their digital subchannels. In smaller markets, a dozen or so stations ‘worth recording’ is more likely.

During brief demonstrations given to reporters, it quickly became clear Amazon designed Recast to work best within Amazon’s own product ecosystem, which means it requires at least an Amazon’s Fire TV stick ($29.99 each, when bought bundled with Recast) for each television. The Fire TV home screen adds a “DVR” menu automatically to the list of user options when it senses the presence of a Recast device. Amazon promises Recast playback will also work on tablets and phones, but not web browsers.

Recast is a larger-than-expected device, about the size of a shoebox, and contains TV tuners and a 500 GB hard drive. Customers will also need to supply an antenna (or buy the $24.99 ’50 mile’ window antenna offered by Amazon as an accessory). The box is designed to be placed anywhere out of sight, and has just three ports — one for power, another for USB to power the antenna, and an Ethernet connection. Amazon says Recast will work best placed where television reception is the strongest. Received signals are sent via Wi-Fi to Fire TV, PlayStation Vue, and the appropriate Amazon Fire apps for iOS and Android. Recast also offers built-in Wi-Fi Direct, which works with Fire TV and Amazon’s Echo Show, but Recast also supports traditional Wi-Fi. Amazon claims videos stream up to 1,440 x 720 at 60 frames per second.

Amazon Fire TV Recast

Recast’s standard configuration ($229) has two tuners and a 500GB hard drive, supporting two concurrent recordings and up to 75 hours of stored HD content. A deluxe version containing four tuners capable of recording four different shows/channels at the same time and a 1 TB drive doubles storage capacity for just $50 more, and will go on sale Nov. 14 for $279.99. Amazon is accepting pre-orders for both now.

PROS:

• Finally a mainstream DVR that works for over-the-air recordings without expensive monthly service fees.
• Amazon has kept the box simple, and has a tutorial/setup procedure to help you find the best place to locate the DVR to receive as many channels as possible.
• Reviews indicate recordings were of good quality, assuming one gets reasonably good TV reception.
• Integrates well with PlayStation Vue and Amazon’s Fire TV.
• Box can be placed anywhere, out of sight, because it connects with your other devices wirelessly.
• Deluxe box offers four tuners and lots of recording space for just $50 more than the base unit.

CONS:

• Amazon should have just bundled an antenna in the box because it is required to assure good reception.
• Recast is clearly designed for use with Fire TV, which means it is not a great option for other box owners.
• Recast limits playback to its own apps and Fire TV. No browser support.
• It only works with one streaming service (PlayStation Vue) and over the air stations. No support for cable, satellite, or telco TV.
• It’s big and bulky.
• Asking $229 for a box that only records over the air stations may be a high hurdle for some.

Amazon introduces Amazon Fire TV Recast, a home DVR for over the air television stations that works best with Amazon’s own Fire TV. (1:14)

Tribune Media walked away from its $3.9 billion dollar merger agreement with Sinclair Broadcast Group this morning, and announced it would sue Sinclair for $1 billion for its conduct trying to get the deal approved, including withholding information and deceiving regulators.

The merger deal was controversial from the moment it was announced, pairing up Sinclair’s 192 stations with Tribune’s 42 TV stations in 33 markets, including well-known stations like WGN in Chicago and WPIX in New York. Sinclair was already the nation’s top TV station owner, and to acquire more stations, Sinclair would have to get TV ownership limits eased, something coincidentally provided by FCC Chairman Ajit Pai, who suddenly announced an interest in bringing back a “discount” on ownership caps for stations broadcasting on the UHF band. That policy was dropped after the country moved to digital over-the-air broadcasting, which negated the perception that UHF channels were less desirable and held lower value than lower VHF channels because of reception quality.

Sinclair’s Long History of Partisan Politics

Sinclair, unlike other TV station owners, also has a long history of being active in partisan politics, airing programming in favor of conservatives and openly advocating for the agendas of the Bush and Trump Administrations. Its long-standing policy to require its stations to air corporate-produced news segments and commentaries during local newscasts has irritated local newsrooms for years, but as the number of Sinclair-owned stations has grown, the practice was eventually exposed with a viral video depicting an uncomfortable collection of anchors from dozens of Sinclair stations decrying “fake news.”

In 2016, Sinclair aired 1,723 stories about the Huntsman Cancer Institute in Utah on 64 of its stations. Most were designed to look like one or two minute news stories, although Sinclair also produced a 30-minute show about the facility. What viewers were never told is that the stories were paid for by the Huntsman Cancer Foundation. In December, the FCC fined Sinclair a record-breaking $13.3 million for failing to disclose the story’s sponsor. The Democratic minority on the Commission called that a slap on the wrist and wanted the maximum fine of $82 million levied on Sinclair for its egregious and flagrant violation of FCC rules.

Sinclair’s past run-ins and controversies guaranteed its merger deal with Tribune would receive special scrutiny. The documents attached to the lawsuit filed this morning reveal Tribune got quickly upset with Sinclair’s hardball lobbying, accusing Sinclair of brazenly flouting the FCC’s rules and setting up the merger for failure.

In the end, even Sinclair’s apparent ally Ajit Pai distanced himself from the TV station owner in July, suddenly advocating the merger deal be forwarded to an administrative law judge for review, a sure sign the merger was in serious trouble with regulators.

How America’s largest local TV owner turned its news anchors into soldiers in Trump’s war on the media: https://t.co/iLVtKRQycL pic.twitter.com/dMdSGellH3

— Deadspin (@Deadspin) March 31, 2018

Tribune Takes Sinclair to Court

This morning, Tribune officially pulled the plug on the merger.

“Our merger cannot be completed within an acceptable time frame, if ever,” Tribune Media chief executive Peter Kern said in a statement. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the merger agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”

That accountability will come in the form of its lawsuit that includes revealing documents about Sinclair’s behavior during the merger process, which includes allegations Sinclair recklessly withheld information and deceived the FCC and Justice Department about the transaction. If true, that could threaten Sinclair’s fitness to hold FCC licenses for its TV stations.

“From virtually the moment the Merger Agreement was signed, Sinclair repeatedly and willfully breached its contractual obligations in spectacular fashion,” Tribune said in its lawsuit. “In an effort to maintain control over stations it was obligated to sell if advisable to obtain regulatory clearance, Sinclair engaged in belligerent and unnecessarily protracted negotiations with DOJ and the FCC over regulatory requirements, refused to sell stations in the ten specified markets required to obtain approval, and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay – all in the service of Sinclair’s self-interest and in derogation of its contractual obligations.”

Tribune claims Sinclair only favored its own financial interests, not the obligations it had to Tribune to get the merger deal approved as quickly as possible. Tribune also accused Sinclair of threatening, insulting, and misleading regulators to keep control over stations it was obligated to sell.

The Sinclair Broadcast Group has come under fire following the spread of a video showing anchors at its stations across the United States reading a script criticizing “fake” news stories. (8:03)

“Sue me.”

Tribune’s executives gradually became more alarmed the more Sinclair negotiated with regulators, claiming Sinclair antagonized officials at the Justice Department. Tribune notes the assistant attorney general of the antitrust division got an earful from Sinclair, lecturing the official that he “completely misunderstand[ood]” the broadcast industry and was “more regulatory” than any recent predecessor.

When Sinclair was cornered by the Department of Justice over demands for station divestitures, the company summarized its position in two words: “sue me.”

Tribune pointed out the Justice Department was prepared to accept the merger with the appropriate stations being sold to new owners, but Sinclair balked. After a series of schemes were suggested to partly divest the stations, Tribune saw the protracted negotiations as unnecessary and imprudent. The agendas of both companies were radically different. Tribune wanted Sinclair to do whatever the FCC and Justice Department insisted be done, to get the deal done quickly. Sinclair wanted the deal and a way to maintain control, even indirectly, over almost every station involved in the deal. Tribune began threatening to sue Sinclair if it did not agree to the Justice Department’s terms.

Tribune’s growing unease with Sinclair’s behavior culminated in this email exchange between Tribune and Sinclair executives in late December, 2017.

Sinclair finally relented in February, 2018, but only partially. Exasperated Tribune executives were stunned as Sinclair now proposed to sell stations to third parties that maintained “significant ties to Sinclair’s executive chairman,” David Smith, or his family.

“Sinclair would effectively control all aspects of station operations, including advertising sales and negotiation of retransmission agreements with cable and satellite operators,” Tribune said in its lawsuit. “Under these proposed arrangements, Sinclair would continue to reap the lion’s share of the economic benefits of the stations it was purportedly ‘divesting’ and would have an option to repurchase the stations in the future.”

“Sinclair fought, threatened, insulted, and misled regulators in a misguided and ultimately unsuccessful attempt to retain control over stations that it was obligated to sell,” the lawsuit concludes.

The country’s largest owner of local TV stations, the Sinclair Broadcast Group, which reaches over a third of homes across the nation, wanted to get even bigger by merging with the Tribune Media Company. Sinclair is raising concerns among media watchers because of its practice of combining news with partisan political opinion. William Brangham reports for PBS Newshour. (8:58)

After the inspector general of the Federal Communications Commission opened an investigation into FCC Chairman Ajit Pai’s close relationship with executives at Sinclair Broadcasting, Pai stopped returning Sinclair’s phone calls and refused any further meetings with America’s largest local TV station owner, at least until last Tuesday when Pai called Sinclair’s general counsel to say its multi-billion dollar merger with Tribune Media was in trouble.

The revelation Pai effectively froze out Sinclair while under investigation came in an ex parte communication disclosed by FCC Commissioner Jessica Rosenworcel’s office late last week.

“I realize that you appear to have been unwilling to discuss this matter for the past several months (and for that reason our counsel and Tribune’s have been reaching out everyone at the FCC but you),” Sinclair general counsel Barry Faber wrote in an email to Ajit Pai the morning after the phone call.

Based on the email, it is clear Mr. Pai personally called Mr. Faber on Tuesday evening to report the FCC planned to refer Sinclair’s buyout of multiple Tribune Media TV stations, including WGN in Chicago, to an independent administrative law judge who would pursue a hearing — a procedure that usually signals the death of a proposed merger or acquisition. The courtesy call was one last consideration to Sinclair by Mr. Pai, giving executives an early warning that would allow them to quietly withdraw the deal as a face-saving measure before the FCC publicly pulled the rug out the next day. The call came as an apparent shock to executives at Sinclair and Tribune, who had repeatedly expressed confidence the transaction would meet approval from the Republican majority at the FCC — one led by Pai, who personally proposed several rule changes that made the Sinclair transaction possible.

Faber told Pai in response the two companies could not agree to withdraw the deal “in the brief period of time provided to us.” Instead, Faber begged Pai to give the companies more time to reassure the FCC and then offered to withdraw the controversial sweetheart sales of TV stations in Chicago, Dallas, and Houston a short time later. The buyers all had long-standing, close ties to the family that founded Sinclair and were suspected of buying the stations to become Sinclair’s silent partners. Pai refused Faber’s request and went public the next morning with the proposal to refer the matter to an administrative hearing. As of today, the deal is still headed for a hearing, but few expect it will survive long enough to begin the process. But the repercussions are likely to last far longer than that.

Faber

While talking to Faber, it is clear Pai also raised the issue of Sinclair’s possible deception in its merger application and its lack of candor about its plan to divest stations in those three cities.

“I understand that if Sinclair has not been completely truthful and forthcoming with regard to these proposed sales, abandoning them would not eliminate such unacceptable behavior. I point out, however, that as we discussed yesterday no evidence exists that Sinclair has mislead the FCC or been anything other than completely candid with respect to our relationships with the proposed buyers and the terms of the transaction,” Faber wrote. “To designate our transaction for hearing based on the possibility that there may be more to the deals than meets the eyes based on the pricing and other terms that have been disclosed, would be extraordinary and unprecedented.”

Deal critics claim Sinclair’s bold effort to barely disguise the sweetheart deals with well-known business associates of Sinclair’s chairman David Smith was extraordinary and unprecedented as well. Several Wall Street and K Street analysts have expressed concern Sinclair was being exceptionally brazen with the FCC, proposing to spin-off stations to known Sinclair associates at fire sale prices, with contract clauses allowing Sinclair to program the stations ‘for the owner’ and also have the right to buy the stations back at their original fire sale price, assuming deregulation of station ownership caps continued moving forward. Sinclair is no stranger to political controversy, generating a full-scale advertiser boycott and Wall Street blowback over mandatory political programming aired on its stations during the 2004 U.S. presidential election. Recently Sinclair’s mandatory editorials and news stories have received even more scrutiny in the media, and have generated a lot of negative press for the Baltimore-based TV station owner.

Pai

Some on Wall Street are reportedly growing tired of Sinclair management’s political agendas getting in the way of potential profits, and this latest high-profile incident is likely to further strengthen that perception. Pai’s announcement that the merger deal smacked of a “lack of candor” and “misrepresentation,” raise questions about the Sinclair’s honesty and character, something that could threaten its ability to keep or renew its stations’ licenses. Long standing FCC rules state a license can be revoked if an owner lies to the Commission or engages in unethical or criminal behavior.

The FCC rarely forgets about egregious bad conduct. In the 1960s, RKO General, a division of General Tire and Rubber Company, falsely testified to the FCC that its television stations, including KHJ Los Angeles, WNAC Boston, and WOR New York did not engage in “reciprocal trade practices” — forcing General Tire’s vendors to buy advertising time on RKO stations if they wanted their contracts with the tire company renewed. In 1969, the FCC had enough evidence to prove RKO officials had lied to the Commission and were brazenly violating FCC rules. In 1975, RKO was once again hauled before the FCC and questioned about allegations General Tire was bribing foreign officials, had a secret slush fund to finance campaign contributions, and misappropriated revenue from overseas operations to cook its books.

Five years later in 1980, the FCC stunned the broadcasting industry by canceling the license of RKO’s Boston station — WNAC, declaring RKO “lacked the requisite character” to hold a FCC license because it openly deceived the FCC by withholding evidence, covered up improper dealings, and maintained a “persistent lack of candor” about its business practices and behavior. The FCC also moved to cancel licenses for KHJ in Los Angeles and WOR in New York. RKO held on for a few more years by appealing the FCC’s decision in various courts. It eventually sold most of its TV stations by the mid-1980s. But by then, FCC administrative law judge Ed Kuhlmann documented even more corruption by RKO, calling the company’s conduct the worst case of dishonesty in FCC history. RKO systematically misled advertisers about station ratings, fraudulently billed clients, destroyed audit reports demanded by the FCC, and filed several false financial statements with the FCC. Kuhlmann wanted RKO out of the broadcasting business for good, ordering RKO to surrender licenses for the two remaining TV stations it still owned in 1987, as well as 12 radio stations.

Sinclair’s critics are likely to invoke RKO General in challenging Sinclair license renewals in the future, noting a similar lack of candor and misrepresentation.

With the Sinclair-Tribune merger deal now swirling in the bowl, shareholders may be the ultimate judge, jury, and executioner, at least at Tribune Media. Sports Fan Coalition and Public Knowledge took the opportunity to remind Tribune’s board of directors it just blew a $3.9 billion deal by allowing Sinclair to manage the transaction with apparent dishonesty and chutzpah:

The FCC has unanimously determined that Sinclair may have “engaged in misrepresentation and/or lack of candor in its applications with the Commission,” in possible violation of the Communications Act and FCC rules. Thus, because Sinclair failed to satisfy its commitments under the merger agreement, Tribune can and should invoke its termination right under the merger agreement. Such termination would not trigger the liquidated damages provisions of the merger agreement.

[…] “Either take immediate action to terminate your agreements for the sale of your company to Sinclair Broadcast Group, or resign as directors of Tribune Media.”

FCC Chairman Ajit Pai may have effectively derailed Sinclair’s $3.9 billion dollar acquisition of Tribune Media today after issuing a statement criticizing the deal.

“Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction,” Pai said in a statement few expected to see from the current chairman. “The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.”

Pai is responding to ample evidence from those objecting to the deal showing Sinclair’s proposal to acquire 42 additional Tribune-owned TV stations and effectively maintain shadow control over stations it planned to divest would put the company far over the federal station ownership cap. Sinclair’s proposal to sell 21 stations to win government approval came under close scrutiny when it was revealed most of the buyers had direct ties to Sinclair or its founding Smith family. Critics charged Sinclair offered sweetheart deals to buyers in return for “sidecar” agreements to effectively retain control of the spun-off stations and have the option of buying them back later at a discount.

Pai

“When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction,” Pai noted. “Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues. For these reasons, I have shared with my colleagues a draft order that would designate issues involving certain proposed divestitures for a hearing in front of an administrative law judge.”

The chairman’s views were welcomed by FCC Commissioner Jessica Rosenworcel.

“As I have noted before, too many of this agency’s media policies have been custom built to support the business plans of Sinclair Broadcasting,” she said in a statement. “With this hearing designation order, the agency will finally take a hard look at its proposed merger with Tribune. This is overdue and favoritism like this needs to end.”

Industry observers suggest such a referral is a death blow in cases of similar mergers because of long delays and uncertainties. The FCC effectively ended the 2015 Comcast-Time Warner Cable merger when it referred the merger to a similar complicated hearing process. The two companies abandoned the deal after getting the news.

Sinclair’s deal has also been a lightning rod for controversy between liberal and conservative groups. The Washington Post found Sinclair “gave a disproportionate amount of neutral or favorable coverage to Trump during the campaign” while portraying Hillary Clinton negatively in much of its coverage. Politico reported Jared Kushner, President Trump’s son-in-law, made a deal with the president’s campaign to get additional access to the president in return for assurances Mr. Trump would receive, in Kushner’s words, “better media coverage.”

After the election, Sinclair-owned stations have been under growing scrutiny for airing mandated “must-air” conservative-slanted stories and editorials during local newscasts. Recent commentaries from former Trump campaign adviser Boris Epshteyn included praise for the president’s newest nomination for the Supreme Court and criticism over how the president is treated by the media.