Locast, a nonprofit streaming service that piped local broadcast signals over the internet, is shutting down after a federal judge ruled against the organization in a rare case tackling the legality of network content delivered online.
The organization said it was “suspending operations, effective immediately,” and it added that Locast was meant to “operate in accordance with the strict letter of the law,” but had to comply with the ruling, with which it disagreed.
The service was in many ways a quixotic bet on the nature of copyright law. It was started by a Washington lawyer, David Goodfriend, who designed the platform specifically to challenge broadcasters. “Do you know you’re supposed to get television for free?” Mr. Goodfriend said in a 2019 interview.
The four big networks — NBC, CBS, ABC and Fox — are given a free license by the U.S. government to make use of the airwaves. But the companies also charge customers — on the order of at least $12 a month — for what are called “retransmission consent fees” through their cable and satellite providers. The fees amount to billions of dollars a year for the broadcasters.
Locast plans to appeal the ruling but it will effectively shut down for good.
“Locast always was meant to be a public service for people who want to watch their local broadcast TV stations, can’t get them over the air, and can’t afford expensive cable, satellite or streaming services,” Mr. Goodfriend said in a statement provided to The Times. “Locast showed that millions of Americans fit that category. They deserve something better than the status quo.”
Mr. Goodfriend, who had cast himself in a real-life David-versus-Goliath affair, dared the broadcasters to sue him to bolster the tenets of copyright law. Locast was set up to take advantage of provisions in the law that gives people free access to network telecasts and includes exemptions for nonprofits.
“We really did our homework,” Mr. Goodfriend said in 2019. “We are operating under parameters that are designed to be compliant within the law.”
The service seeks donations of $5 a month and interrupts the stream every so often to prompt users to make a contribution. About 3.2 million viewers have signed up for the service but not all of those people have made financial contributions. The service generated $4.3 million in revenue last year. The organization also offers complete access without donation requests to about 50,000 people who have shown economic hardship.
In 2019, the four major networks banded together and sued the service for infringement. Locast filed a suit of its own, claiming the networks had colluded in an effort to squash the nonprofit’s business dealings.
Late on Tuesday, Judge Louis L. Stanton of the Southern District of New York ruled against Locast, siding with the broadcasters over a specific element of copyright law that has to do with how charitable offerings can be solicited and used.
The judge found that Locast was using the proceeds to expand its service to other cities, a move that in his view ran afoul of the law. The copyright code allows nonprofits to solicit funds to “defray the actual and reasonable costs of maintaining and operating” the service. Locast was available in around 36 markets that served a little over half the U.S. population.
In a joint statement, the networks called the judge’s ruling “a victory for copyright law, vindicating our claim that Locast is illegally infringing copyrights in broadcast television content in violation of federal law.”
Locast’s appeal of the ruling will be heard by a three-judge panel in the Second Circuit Court of Appeals. If the decision is overturned, it could offer a blueprint for other similarly designed services to operate.
In the meantime, fans of Locast cried foul.
“It is absolute lunacy these companies are suing Locast,” said Cathy Gellis on Twitter. “The only reason I ever watch their affiliates is thanks to Locast. For them to sue Locast, thereby saying they don’t want viewers, should come as a shock to their advertisers. Because w/o Locast I’m not watching their ads.”
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