Aside from a streaming television service, what exactly is Locast?
A court will be asked to answer that question after receiving competing statements this week from Locast and a consortium of broadcasters who are suing the streaming upstart.
The not-for-profit streaming service supplies local broadcast television feeds over the Internet in more than 30 regions, including San Francisco, Los Angeles and Sacramento. Channels available through the service include local ABC, NBC, CBS and Fox affiliates along with other digital broadcast channels.
Unlike cable and satellite companies, Locast pays nothing to re-distribute these broadcast signals, pointing to a loophole in federal copyright law that says not-for-profits do not need to get permission before distributing freely available broadcast signals to others.
The loophole was intended for hospitals, college campuses and others who wanted to re-distribute broadcast television signals through a local system to a limited number of viewers like those receiving in-patient medical care or students who live in a dormroom. But the law never explicitly limited the loophole to these applications alone, and Locast has been operating since 2019 under the presumption that it can offer broadcast signals to streamers as long as it doesn’t directly charge them.
But Locast does, sort of, charge its users: While the streams are freely accessible within markets supported by the service, a commercial interrupts a program every 15 minutes until a viewer agrees to donate $5 a month to the service. Broadcasters say this is proof that Locast operates as a freemium service, not as a not-for-profit.
“They cannot prove that they make transmissions ‘without any purpose of direct or indirect commercial advantage,'” the broadcasters wrote through their attorney this week in a letter sent to a district judge overseeing their lawsuit. “Defendants do not qualify [for the copyright exemption] because they impose ‘charges’ on users, and those charges are neither ‘assessments’ nor ‘necessary’ to defray the cost of operating their service.”
Locast has always said that the $5 a month charge has been used to offset technology and other costs incurred as a result of providing service to customers in the regions where it operates. In a competing letter sent this week, the service said the broadcasters had not proven otherwise with any evidence.
“[Locast] pays typical, market prices for its costs, such as physical space, equipment, technical upkeep and Internet access,” the service wrote. “And it defrays these costs by seeking and accepting donations, including donations from viewers, for the actual and reasonable costs of maintaining and operating the secondary transmission service.”
Unlike other not-for-profits, Locast contends that it “pays no dividends, no distributions and no salaries” as part of its service.
Broadcasters see Locast as a reincarnation of Aereo, a for-profit streaming television service that opened in 2012 without reaching distribution agreements with local broadcasters. A Supreme Court ruling ultimately resulted in the closure of that service; Aereo later sold its assets to TiVo’s parent company Xperi.
Locast is seeking its day in court, believing it will win on the merits of the federal copyright law as it is currently written.