Locast was ordered to shut down its online television service forever on a permanent injunction issued yesterday by a federal judge. The ruling came two weeks after the judge gave major broadcast networks a major victory in their copyright lawsuit against Locast, a nonprofit organization that provided online access to television stations.
Locast will have to win on appeal to stream broadcast channels again. Locast already suspended the operation following the September 1 ruling, which said it was not entitled to an exemption from copyright available to non-profit organizations, so the permanent injunction does not change the status quo.
U.S. District Judge Louis Stanton cited a December 2019 agreement between Locast and the networks that limited the scope of the lawsuits and said a permanent injunction should be imposed if the court ruled that Locast is not eligible for copyright exemption. The agreement does not prohibit Locast “from applying for a stay of the permanent injunction awaiting appeal, nor does it deter television stations from opposing such a stay,” the agreement states.
ABC, CBS, Fox and NBC proposed a permanent injunction following the Sept. 1 ruling. The judge’s ruling said yesterday that the defendants “are permanently detained and ordered to operate Locast”, but that “the introduction of an injunction will allow for appeal planned in the agreement.”
The case is in the U.S. District Court for the Southern District of New York, and Locast may appeal to a federal appeals court. We asked Locast today if it plans to appeal, and will update this article if we get an answer. Local attorney R. David Hosp said earlier that the company “remains committed to providing free local television service to all Americans,” so an appeal seems likely.
Locast lost because it used revenue to expand
The broadcast networks sued Locast in July 2019, claiming that the nonprofit “must be licensed to broadcast copyrighted television programs” even though the television channels are available free of charge. Locast argued that its service is legal because U.S. copyright law allows secondary transmissions from nonprofit organizations if they do not receive any “commercial benefit” and do not charge users anything more than what is “necessary to bear the actual and reasonable costs.” in the maintenance and operation of the secondary transmission service. “
Stanton stated that Locast is not eligible for this exemption because it uses payments from viewers to fund its expansion into new geographic markets. “[U]According to the statute, revenue from fees to recipients can only be used to cover the actual and reasonable costs of maintaining and operating the service, not to expand it to new markets, “Stanton concluded.
The free version of Locast’s service interrupted programming every 15 minutes with donation requests; users could disable the ads by paying $ 5 a month. Users who could not easily pay this fee could request that the service stop showing donation requests based on their financial circumstances.
Locast also received donations from pay-TV providers such as AT&T, but direct payments from users accounted for $ 4.37 million of Locast’s $ 4.52 million in revenue in 2020, according to the judge’s decision. “On these undisputed facts, in 2020 Locast made far more money from user fees than was necessary to cover the cost of maintaining and operating its service,” Stanton wrote.
Decision allowed “hard-earned profit”
Before the operation was discontinued, Locast said it streams broadcast stations in 36 geographic markets containing 55 percent of the U.S. population. These markets included New York City, Los Angeles, District of Columbia, Miami, Boston, Baltimore, Chicago, Detroit, Atlanta, Dallas, Denver, Houston, Phoenix, Seattle, and San Francisco.
The Electronic Frontier Foundation (EFF), which represents Locast in court, said earlier that the copyright exemption decision “demonstrates once again how giant entertainment companies use copyright to control when, where and how people can receive their local TV broadcasts. and get people to buy expensive pay-TV services to get their local news and sports. people regardless of their ability to pay. “