The ABC, CBS, Fox and NBC broadcast affiliates in Portland, Ore., have told Internet TV venture Skitter to stop distributing their network feeds as they "review our retransmission agreements," according to a notice the startup sent to subscribers.
Skitter, founded in 2009, is aiming to deliver broadcast TV programming over broadband to subscribers in local markets via a range of connected TV devices, pitching it as a lower-cost option than cable TV.
In the initial Portland market, the company has a partnership with Stayton, Ore.-based Stayton Cooperative Telephone Co., which is planning to offer an IPTV service based on Skitter's technology, according to Skitter. As part of the partnership with the telco, Skitter had been expecting to leverage the retrans agreements TV stations signed with Stayton Cooperative Telephone Co. to offer its own direct-to-consumer service.
Now, the affiliates of the major networks have apparently decided that the approach mandates further review.
According to Skitter, "the major networks wanted to review our retransmission agreements and... we removed the channels at their request during the process." The company said it has been working with the networks "and have made progress toward a new agreement but it is difficult to know how long this will take."
Representatives for Norcross, Ga.-based Skitter did not respond to a request for additional comment.
Previously, Skitter was selling access to 10 Portland-area channels, including ABC, CBS, Fox and NBC, for $12 per month. The service provides live TV and network-based DVR features, currently accessible to users with Roku or WD broadband-connected set-tops.
Now Skitter's lineup in Portland is $6 per month for 12 channels: PBS, PBS Encore, KWVT, TBN, TCC, JCTV, Enlace, SOAC, Retro TV, The CW, AntennaTV and Azteca.
"We realize these changes may be frustrating to you," Skitter said in the subscriber notice. "It is difficult for us as well. We'd love to see you continue with us. If you want to cancel your account we understand."
After Skitter launched in Portland earlier this spring, Fox affiliate KPTV said the startup did not have permission to carry its signal.
But Skitter president and co-founder Bob Saunders, in an interview with Multichannel News last month, said his company contacted KPTV to request service and did not receive a response after 30 days, so Skitter picked up the station under FCC "must carry" rules for no payment. "We're not stealing their content," Saunders said.
Skitter has positioned itself as trying to play by the rules, and Saunders said the company is completely willing to pay retransmission fees to carry broadcast content.
Other ventures attempting to offer over-the-air television signals via the Internet have run afoul of broadcasters.
Most recently, Barry Diller-backed startup Aereo, which provides a streaming TV service in New York City via dime-size antennas that it says are dedicated to individual users, has been sued by major broadcasters alleging copyright infringement.
Aereo has countersued, seeking a judgment that it is within its rights to let users access the remote antennas. In addition, Aereo argues that its service is allowed under a federal court ruling that permitted Cablevision Systems to offer the network-based RS-DVR service, which similarly provides dedicated remote DVR storage space for subscribers' use.