Locast Suspends Operations after Court Ruling

Free TV streaming service Locast suspended operations Thursday, two days after after a court ruling in favor of TV networks trying to shut down the service.

The non-profit service, which streamed local TV stations online without the stations’ permission, had stopped running fundraising announcements Wednesday in reaction to the decision but announced a suspension of operations Thursday morning.

“As a non-profit, Locast was designed from the very beginning to operate in accordance with the strict letter of the law, but in response to the court’s recent rulings, with which we respectfully disagree, we are hereby suspending operations, effective immediately,” the group said in an email to members.

Locast refers to itself as a translator as allowed under the 1976 Copyright Act. Tuesday’s partial summary judgement found that while translators are allowed to run announcements seeking donations to pay for operation of the translator, Locast had overstepped its bounds by using the funds to expand into new markets.

Locast in the Twin Cities Locast’s 36 markets include Minneapolis, Milwaukee, Madison, Sioux City, Sioux Falls, Rapid City, and Denver. The service streams most stations, including subchannels, within their local market area, though it lacks some stations such as KTCI in the Twin Cities.

Locast has argued that since it is a non-profit, a provision in the Copyright Act that allows TV translators to relay stations without permission should also apply to its service. The major networks filed a federal lawsuit two years ago alleging that “Locast is nothing like the local booster services contemplated by Congress in creating this narrow exemption.”

The fundraising portion of Locast’s model that was the subject of Tuesday’s order.

“The obvious economic fact is that these ‘donations’ are really a scale of fees for uninterrupted service, and it works. At present, Locast is almost fully funded by payments from users.”

The court found that while translators are allowed to raise money to cover their own operating costs, they are not allowed to fundraise to expand into new markets.

“But under the statute, income made from charges to recipients can only be used to defray the actual and reasonable costs of maintaining and operating the service, not of expanding it into new markets . The argument that Section lll(a) (5) should not “prevent” a natural process of expansion misconceives the statutory structure . Retransmissions (i .e ., secondary performances of copyrighted matter) are already penalized (“prevented”) by the Copyright Law in its main section. See 17 U.S.C. § 501 (“Anyone who violates any of the exclusive rights of the copyright owner . . is an infringer of the copyright or right of the author, as the case may be .”) . Nothing in Section 111 specifies that an expansion of the number of infringing transmissions is exempt from that law, and it is not for a court to infer that Congress really meant to allow them. It would have been simple for Congress to add one word to paragraph (5) to make it read” . . costs of maintaining, expanding, and operating the secondary transmission service.” But expansion is nowhere mentioned, and it is therefore excluded from the short, tightly- crafted grant of exemptions.”

Louis L. Stanton, U.S. District Court opinion and order In a Tuesday evening email to members, Locast said it was evaluating the decision and formulating its next steps.

“We are disappointed in the ruling today and disagree with its conclusions and reasoning. Our client is in the process of evaluating the decision and formulating next steps. Locast provides a valuable service to its over 3 million users who are otherwise unable to access the over-the-air broadcasts to which they are entitled by virtue of their location or economic circumstances. Our client remains committed to its mission of delivering free, local broadcast TV service to all Americans, and particularly for those consumers who can’t afford pay-TV services like cable, satellite, or streaming, or who can’t get their local broadcast channels using an over-the-air antenna.”
R. David Hosp, Partner Orrick, Herrington & Sutcliffe

Tuesday’s summary judgement does not end the court case. (9/6/2021)