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FilmOn settles with nets

But Alki David vows to save streaming service

Digital entrepreneur Alki David and the television networks have reached a settlement over his FilmOn service, but the contentiousness over the startup’s online streaming of broadcast stations may continue.

According to the terms of the settlement, FilmOn will pay the networks and other plaintiffs $1.6 million, after CBS and other broadcast networks won a court order in Novmeber 2010 halting FilmOn’s unlicensed streaming of their stations. Months later, David, on behalf of R&B and hip hop artists, filed a copyright infringement suit against CBS Interactive, claiming that CNET made file-sharing software available via Download.com.

According to the terms of the settlement, David will be prohibited from funding or supporting the CNET suit, but he told Variety that the legal fees in the litigation are already paid and that the artists will continue to pursue the case. Earlier this month, U.S. District Judge Dale Fischer dismissed two copyright infringement claims against CNET but kept alive an inducement claim.

The settlement still must be filed with the federal court, and David suggested that he may still back out, miffed at the way that its terms were disclosed to the media. “The CNET case is far from over,” he said. “It is a prepaid lawsuit.”

CBS said in a statement, “As far as we are concerned this issue is fully and completely resolved.” CBS, Big Ticket Television, NBC, Fox Television Stations and ABC were among the plaintiffs in the suit over FilmOn.

Although the settlement calls for FilmOn to refrain from streaming the broadcast signals, but David plans to continue his service — and even expand it — by different means.

FilmOn was a precursor of sorts to Aereo, the recently launched venture funded by Barry Diller that streams broadcast signals to subscribers via a “farm” of thousands of dime-sized antennas. The difference is that a judge earlier this month handed an initial court victory to Aereo, allowing it to continue at least until the lawsuit goes through the legal process.

David said that FilmOn created such a system of antennas three years ago, and have deployed more than 2.5 million of them in major cities across the country, with service started already in Los Angeles, New York, Minneapolis and Chicago.

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