The summary judgement just means the case will go to trial likely followed by appeals as needed by either side. Locast isn't done yet, but there's no question this decision is not good for them...
And exactly how little would it take be "non-profit" in your opinion? The non-profit Red Cross has a ~$3 billion annual budget. 501(c)(3) non-profits are allowed to show a net profit as long as that profit is not distributed to private individuals or shareholders. Non-profits are allowed to pay reasonable compensation to employees for services rendered. In Locast's case the net profit is used primarily to expand the service to new areas.If there are 3 million donors, that's $15 million a month and that would seem to significantly exceed "non-profit" conditions.
If you don't think other non-profits maintain legal funds and lawyers on retainer, as well as paying lobbyists to push for or against pertinent legislation, think again. As long as they're not distributing profits to private individuals/shareholders, it's pretty much permitted under the existing IRS 501(c)(3) rules.What is important is that the money gets spent on something other than lawyers. Building a war chest is often frowned upon.
I agree, and the judge saying 17 USC 111(c)(5) doesn't specifically allow expansion is definitely bogus in my non-legal opinion since it doesn't specifically prohibit it either. It's likely most or all non-profits started out fairly small and expanded as the need for their services and/or products grew. As I've said elsewhere, PBS didn't hit the ground running with ~330 stations...The judge's opinion is bogus IMO, I know of no law or even any policy that claims that a non-profit can't grow into new markets.
Actually, Locast would be completely within the law if they charged reasonable fee to support the operation and maintenance of the service rather than depending on donations. In my opinion, the donations always were voluntary. Want to use the service uninterrupted? Pay up. Don't want to pay up? Don't use the service or put up with the interruptions. Your choice...Just because it's old, or wrong for users, doesn't make it wrong for the networks. They want to get paid. They don't want broadcasting without permission. It might not make a lot of business sense in 2021, but I don't pretend to completely understand the model. Like a lot of thing around broadcasting which many of their standards were created in first the radio era and later in the early TV era, th
I'm a Locast subscriber and got an email late yesterday where they will no longer include "nag" interruptions for non paid subscribers. The issue they've determined is that it no longer becomes a "donation" when you include these types of nags where you have to pay to get them removed. I can see the court's point. So now a donation becomes completely voluntary (as a donation should be). I will keep donating as I want Locast to succeed, but I no longer have to in order to watch TV uninterrupted.
In my non-legal opinion, the judge was wrong. His contention that the law doesn't specifically allow expansion of the service fails, I believe, since the law doesn't prohibit expansion either. Since the case is based on a US law, the 10th amendment to the US Constitution comes to mind: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." (emphasis added).Since that was the focus of the judge's ruling, I would guess the future expansion of Locast is what is really in jeopardy, more so than continuation of service in existing markets.
If current Locast users are located within reasonable OTA reception distance from their local broadcast transmitters, the loss of the service should not be as much of a problem as it would be for those whose only other option for locals would be a paid Cable, satellite, or streaming service.
Planned expansion into under served areas isn't specific enough?Paying lawyers and lobbyists is fine. It is collecting large amounts of fundage that isn't destined to be spent on something specific that is frowned upon. This is the textbook definition of a "war chest" for businesses.
If the Red Cross takes in more money than they need for actual expenses this year should they be shut down?LOCAST had been adding a market every few months. If that's the case, does their operations plus opening up a new market really cost $15 million X the number of months between markets lighting up?
I don't think so.
If a court saw the refund of excess donations as distributing "profits" to private individuals that would violate the non-profit rules.I have been thinking about it more. It seems to me that a nonprofit local co-op structure should pass legal muster. You could charge annual "dues" for operations (for example, $60 a year like Locast was charging) and members would receive a refund of excess revenues at the end of the year, or perhaps a credit toward the next year's dues. It would also be restricted to serving the local market (no expansion into other markets), so you would have one such organization per market. I would still expect the broadcasters to try to sue them out of business, but it seems to me that such a structure would pretty clearly pass muster in terms of meeting the intent of Congress in creating the law authorizing nonprofit retransmission.
Why did none of the non-Big 4 stations join the lawsuit?The issue is the locals, with the support of the networks, do not want their signals rebroadcast for free by anyone whether for profit or non-profit and will use any means they can to put a stop to it. And they are pretty well undefeated in their efforts.
Are they not allowed to maintain a fund for unexpected loss expenses? And a legal fund? Many non-profits do. Neither one of us has seen their financials to know how much money was allocated to what. Keep in mind, this ruling was based on just one man's interpretation of the law. I'll be very surprised if appeals are not forthcoming...The only disasters that LOCAST faces are equipment failures and those may cost hundreds to fix once in a while, not millions per month.
They've canceled donations for now. I expect the lawyers are going through their options at this point, to work out the strongest path forward.If they are going to appeal and keep the legal fight going, IMO they need to say so. I think some people may keep donating if they are going to fight this ruling, but if people think they are going to pack it up and give up, they will not.
"Must carry", etc, are FCC rules for cable and satellite that have no bearing on this case. Any station management not asking the court to be included in the suit would be excluded from any settlement. This is not a class action suit.It may be oversimplifying, but I would wager that any station that chose to opt out of must-carry would be part of the lawsuit.
I agree, bur if the courts award any monetary damages for past actions, only those included in the lawsuit will share in them.As clearly stated, cease and desist is the goal. Stop people from rebroadcasting stations without permission or compensation. The settlement they seek is for Locast to be treated like a MVPD that needs to ask and pay for permission (which would help non-big 4 stations to the same extent that it helps big 4 stations).
Dish breaks out the charge to subscribers for the locals package that can be opted out, not the actual cost per station. I expect the local stations are not getting paid for those subscribers that opt out.Lets see here.... DFW Market (#5):
Sacramento Market (#20):
- ABC (WFAA) - Tegna Inc.
- CBS (KTVT) - CBS O&O
- NBC (KXAS) - NBC O&O
- Fox (KDFW) - Fox O&O
It's all part of the Retransmission content which was passed in 1992 as part of the Cable Television Consumer Protection and Competition Act which was veto-ed by President Bush on October 3rd, 1992, only to have the veto overridden two days later by both legislative chambers. As local advertising revenues have dried up, the stations have been looking to make up that income through retransmission fees, partially because the stations have to pay the networks for carriage. (And, ages ago, the networks paid the stations for carriage. Blame the increasing sports rights costs.)
- ABC (KXTV) - Tegna Inc.
- CBS (KOVR) - CBS O&O
- NBC (KCRA) - Hearst Television
- Fox (KTXL) - Nexstar Media Group
Should the fees be broken out? Yes. Will they? Probably not due to contractual restrictions.