The Federal Trade Commission has ordered Loccast‘s free TV service to be permanently shut down. Although the company technically doesn’t charge for the service, it often interrupts the free streams to ask users to sign up for $5 donations. The broadcasters sued Locast because their content was protected by copyright law and their free service did not meet an exception. While they did not charge any fee, Loccast’s requests for donations exceeded their actual and reasonable operating costs.
Loccast’s non-profit status circumvents copyright law
In a recent lawsuit, the four major U.S. broadcast networks sued Locast for retransmitting their local programming. Although Locast presents itself as the Robin Hood of television, the organization’s mission and operations are distinctly commercial. The lawsuit claims that Locast’s copyright-protected content violates the rights of copyright holders and is therefore illegal. The judge’s ruling does not address whether the company has a moral obligation to compensate non-paying subscribers.
While Loccast’s non-profit status makes it exempt from copyright law, its reliance on a retransmission fee may not be enough to protect its customers. The company’s use of the non-profit status of local broadcast stations makes it difficult to establish that its users do not benefit financially from the content it offers. In the case of the Worldwide Church, the judge found that the plaintiff’s claim was sufficiently stated in a civil RICO action.
Loccast’s requests for donations exceed actual and reasonable costs of maintaining and operating the service
The courts have decided that Loccast’s requests for donations exceed its actual and reasonable costs of operation and maintenance. Although the statutory exemption allows for the collection of user donations, the court found that Locast had exceeded those costs in other ways. Locast frequently interrupted its programming to prompt users to donate. The court noted that the money Locast collected was used for expansion, not simply operation and maintenance.
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Judge Stanton’s decision effectively shut down Locast’s nonprofit status, which had argued that it violated U.S. copyright laws and thus was in violation of its mission. The ruling further pushed the organization to withdraw its request for donations and suspend the service. The Electronic Frontier Foundation has since taken the opposite position and suspended the service. Loccast is appealing the decision.
Loccast’s retransmission of local television signals
The ruling against Loccast’s retransmission of the local television signal is a significant setback for the nonprofit company. In a lawsuit, the four major broadcast networks argued that Locast violated copyright laws, claiming that the nonprofit was abusing copyright law by distributing its signals to people outside their market. Ultimately, Judge Louis L. Stanton sided with the broadcasters. But that ruling leaves Locast and its subscribers in a difficult position.
In July 2019, four major broadcast networks sued Loccast, arguing that the nonprofit was violating copyright laws by receiving financial and promotional support from satellite and cable companies to prevent them from retransmitting local programming. Locast said that it used the money it received from the subscription fees to expand its service and thereby benefit from their financial support. Although it is unclear how long Locast will appeal the ruling, it does expect to shut down its service for good.
Hulu’s Live TV is an alternative to Locast
A court order has halted operations of Loccast, a free streaming TV service in the US. Locast, which marketed itself as a “non-profit” service, was ordered to shut down permanently in September because it did not have the proper retransmission license to stream local affiliates. A few weeks after the court ordered the service to stop operating, Locast suspended operations. Two weeks later, the company shut down permanently. However, it is unclear whether the battle with the networks will be resolved anytime soon.
In January 2018, four major broadcast networks sued Loccast, alleging it violated copyright laws and was colluding with pay-TV providers to prevent viewers from watching their programs. The lawsuit claims that Locast illegally obtained financial support and promotional support from cable and satellite providers, while also preventing the carriers from retransmitting local programming. Locast’s service consists of 36 TV markets in the U.S., including Los Angeles, New York, Chicago, Miami, Boston, Seattle, San Francisco, and the District of Columbia.
