Updated: Portland Fox Affiliate At Odds With Internet TV Startup Skitter

Internet TV startup Skitter -- which has launched a subscription service in Portland, Ore., offering 10 local TV channels streamed over broadband -- does not have permission to carry the signal of KPTV, the Fox affiliate in the market, station general manager Patrick McCreery said. But Skitter says it's operating within the letter of the law.

"We don't have a retransmission agreement in place with that company," McCreery said. "Frankly there's quite a bit of confusion about what they intend to do."

Skitter president and co-founder Bob Saunders, reached late Wednesday, said his company contacted KPTV to request service but 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 retrans agreements with each of the local Portland stations, he added, except KPTV and the PBS affiliate, which is automatically considered must-carry.

Representatives from ABC, CBS and NBC affiliates in Portland did not respond to requests for information.

Skitter has a deal with Stayton, Ore.-based Stayton Cooperative Telephone Company, which is planning to offer an IPTV service based on Skitter's technology. The telco also owns part of Southeast Content Group, the content-licensing arm of Skitter, according to Saunders. "We're trying to be a good actor here," he said.

Skitter "quietly" launched its over-the-top service in Portland in March, technology blog site GigaOm reported Tuesday. The service, priced at $12 per month, provides DVR features and live feeds of 10 channels -- including KPTV (Fox) as well as PBS, ABC, ThisTV, ION, TBN, CW, AntennaTV, CBS and NBC -- to users of Roku or WD broadband-connected set-top boxes.

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 has been sued by major broadcast companies. (Aereo has countersued, seeking a judgment that it is within its rights to let users access remote antennas.)

By contrast, Skitter seeks to secure the proper rights and pay required retrans fees for its broadband-delivered services, Saunders said.

But McCreery said KPTV has no such agreement in place.

"There are network implications, at least from Fox's standpoint -- we may not be able to grant them retrans" depending on how KPTV's signal is distributed via Skitter. For example, he said, it's not clear how the Skitter service would prevent a user outside the Portland DMA from accessing the TV stations in the market.

McCreery added, "If they are in fact using our signal right now, we have a much bigger problem."

According to McCreery, KPTV was first contacted by the "Southeast Content Group" in January, with an "IPTV" retransmission request. "We had no idea they were related to Skitter," he said. The Southeast Content Group requested copies of KPTV's standard retrans agreements on March 26, which was the last communication McCreery had with the startup until he called Skitter Tuesday after he saw the GigaOm article.

But Saunders said Skitter never received a reply from KPTV within the FCC's 30-day waiting period. "Believe me, when we send out notices our intent is to sign deals," he said. "We are completely in alignment with the FCC requirements."

KPTV, which is owned by Meredith Broadcasting, currently has retrans agreements with Comcast, Verizon FiOS TV, DirecTV, Dish Network and Charter Communications, as well as about 30 independent operators in the Portland DMA.

Skitter, based in Norcross, Ga., was founded in 2009, according to its website. Saunders "was involved in creating one of the world's first photo and graphics search technologies; a widely deployed, Unix-based telecommunications platform; and an early TCP/IP platform," according to his bio on the Skitter website.