The case against Locast is moving forward as ABC, CBS, Fox, and NBC have filed a letter to the US District Court of New York, outlining their claims against Locast and asking the court to reject Locast’s defense.
The suit was initiated in July 2019, over a year after Locast launched as a service to provide local channels in select markets via an internet connection. Locast justifies providing the service by arguing that it’s protected under the Copyright Act. The broadcasters argue that Locast is retransmitting the signals of their local TV stations without permission.
In a letter through their lawyers, the broadcasters make three claims: that Locast doesn’t qualify for the copyright exception which only applies to localized media, that Locast is gaining commercial advantage, and that Locast is charging for the service it offers.
“Like many for-profit companies, Locast employs a ‘freemium’ business model,” wrote Gerson Zweifach in a letter from Williams & Connolly who represent the broadcasters. “Specifically, following an introductory period, Locast interrupts a user’s television stream every 15 minutes on a given channel with an advertisement asking the user to pay $5 per month (which Locast labels a ‘donation.’). If the user does not agree to pay the monthly charge, he or she is sent back to Locast’s program guide and must navigate back to the channel he or she was watching. If, however, the user pays, he or she receives uninterrupted service for the month or a pro-rated portion thereof.”
Locast also filed a letter through Orrick, Herrington & Sutcliffe. In the letter, the streaming service notes that it is operated by Sports Fans Coalition of New York, a 501c(3) charitable nonprofit organization, that does not gain anything financially from the service.
“No one owns SFCNY,” the letter says. “It pays no dividends, no distributions, and no salaries. It pays typical, market prices for its costs, such as physical space, equipment, technical upkeep, and internet access. And it defrays those costs by seeking and accepting donations, including donations from viewers, for the actual and reasonable costs of maintaining and operating the secondary transmission service. Plaintiffs cannot dispute any of these facts.”
In Locast’s letter, it was also mentioned that over half of the service’s active members use Locast without making a donation.