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Well, if the money is not being spent (per the court ruling that it cannot be spent on anything other than providing service) but is earning interest, then I wonder if that interest income would still be attributable to income earned "from service fees." Or, would such income be indirect enough that the interest earned on those funds would be allowed to be spent toward expanding service? (This may not help Locast, while they are subject to the permanent injunction. However, any other organization thinking about setting up a similar service may be interested in the legal status of such interest income.)
I expect the legal fees are adding up as Mr. Goodfriend and the EFF prepare for an appeal of the judges mis-application of the law (my opinion). At no time did Locast ask for payment of any "service fees", they only asked for "donations" that were rewarded with the removal of the donation pitch. The court ruled that the law did not allow the donations to be used for expansion, but neither does the law prohibit expansion. The court ruled that all the donations were in fact "service fees", when the law only says "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." In my opinion, the court can't have it both ways. If the donations collected are considered by the court to be "assessments" that can only be used to maintain the service, then any amounts collected above those costs must by definition actually be "donations" to the non-profit that can be used for other purposes. Such as expansion of the service...

I'm really looking forward to seeing what the appeals process shows us. I won't be surprised to see the 10th Amendment brought up. "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."
 

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Another thing that occurred to me: If another organization tried to set up a similar service while Locast is still subject to the permanent injunction, would Locast be allowed to donate to that other organization? Or does the injunction prohibit Locast from having anything to do with any streaming service, even if Locast is not the organization operating it?
Keep in mind that Locast is not the non-profit collecting the donations, SFCNY is.In reading the court ruling, I don't see anywhere that they say how the donations can be spent since the Locast service is shut down.

I like the principle of the 10th Amendment. Of course, that could lead to Locast (or any successor organization) needing to obtain a license from each state in which the service operates.
State licenses would only be needed if the individual states passed their own laws prohibiting the service. I don't see that happening, so the "or to the people" part of the 10th would apply as I see it.
 
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