Locast

» see locast.org as it lived, on the wayback machine

~ the obituary ~

locast was built to solve a problem that does not exist here. the national channels in turkey arrive over the air or off türksat for nothing, and no operator pays a broadcaster for permission to carry them. in the united states that permission is a market worth billions a year, and the fees roll downhill into every cable bill in the country. locast was an attempt to route around the whole arrangement using a nonprofit and one paragraph of copyright law.

david goodfriend, an attorney and former dish network executive, started it in january 2018 out of new york city. the idea came to him while he was lecturing about aereo, the company the supreme court had killed in 2014 for renting each subscriber a tiny individual antenna. locast picked up the free over-the-air signals in a given market and streamed them to people inside that market, with geofencing to keep them there. it asked for five dollars a month and interrupted your viewing every fifteen minutes if you did not pay, which felt exactly like a subscription and was legally supposed to be something else.

it grew fast for a service with no advertising budget. by january 2021 it had passed 2.3 million registered users, more than a million of them added during 2020 alone. by that august it was running in 36 markets covering roughly 55 percent of the country. the donations were the interesting part: at&t put five hundred thousand dollars in, and goodfriend's old employer had an obvious commercial interest in anything that weakened retransmission fees. the broadcasters noticed.

~ the case file ~

~ the exemption ~

section 111 of the copyright act contains a carve-out written decades ago for the people who put translators and boosters on hilltops so that a valley town could receive a signal at all. a nonprofit may retransmit a broadcast without a license as long as it makes no direct or indirect commercial advantage and charges nothing beyond what is needed to defray the actual and reasonable costs of maintaining and operating the service.

goodfriend read that clause and built an entire company inside it. the five dollars was not a price, it was a contribution toward operating costs. the interruptions were not a paywall, they were a fundraising appeal. it was a lawyer's product in the most literal sense, and for three years it held up well enough that nobody could say with confidence it was wrong.

~ what the judge said ~

disney, cbs, nbcuniversal and fox sued on 31 july 2019. on 31 august 2021 judge louis stanton of the southern district of new york ruled on summary judgment that the donations were charges, and that locast had spent the surplus expanding into new cities. expansion, he wrote, is not the same thing as maintaining and operating what you already run. the exemption covers the second and says nothing about the first.

locast suspended service two days later, on 2 september, without waiting to be ordered to. a permanent injunction followed on 15 september. the loss was narrow in the way that legal losses usually are: not a ruling that streaming local television is theft, but a ruling that this particular nonprofit had spent its money in a way the statute did not describe.

~ thirty-two million and seven hundred thousand ~

on 28 october 2021 the parties filed a consent judgment for $32 million in statutory damages, and the headline number went everywhere. bloomberg law later got hold of the side agreement. the broadcasters actually settled for $700,000 in cash plus whatever the used servers fetched, with a satisfaction of judgment to be filed once the terms were met.

the money was never the point. the injunction was. goodfriend agreed personally never to operate another service relying on the section 111 nonprofit exemption, which closes the door behind him as well as on locast. aereo had already established that you cannot do this for profit. locast established that you cannot do it as a charity either, at least not while growing.

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