In recent weeks, decisions of a US District Court judge in the Southern District of New York led to the suspension of service by the Internet streaming company Locast, which built its business on streaming local television stations generally without obtaining the consent of TV stations or the copyright holders in the programs they broadcast.  Facially, the service looked much like that offered by Aereo, which the Supreme Court determined seven years ago violated federal copyright law by retransmitting TV stations without first obtaining the consent of the copyright holders (see our article here on the Aereo Supreme Court decision).  Locast offered a novel defense to the claims that it was nothing but an Aereo imitator, contending that the Copyright Act permitts nonprofit entities to retransmit copyrighted materials without the consent of copyright owners.  The federal judge in the Southern District rejected that argument in his opinion on a motion for summary judgement, and then issued an injunction ordering the service to cease operating (though Locast had already suspended those operations after the initial decision on the motion for summary judgement).  What did the judge find?

Locast had argued that Section 111(a)(5) of the Copyright Act permits “secondary transmissions” of a “primary transmission” (i.e., an internet transmission of an over-the-air television signal) without permission of copyright holders if the retransmissions are made by a government body or nonprofit organization “without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.”  This provision of the rules was intended to allow governments and local nonprofit associations in rural communities to provide TV translators or community antenna systems to bring television service to their communities.  Locast argued that the provision should also be interpreted to authorize its service, which interrupted service every 15 minutes to ask for donations unless a user paid a $5 monthly “contribution” to the service.  The judge determined that the payment of this $5 monthly fee took Locast outside the narrow “nonprofit organization” exception provided by the law.
Continue Reading Looking at the Court Decision Which Led to the Shuttering of Locast’s Retransmission of Local TV on the Internet