Locast was similar to Aereo, which operated on a commercial basis with users paying to lease individual antennas placed in nearby warehouses.

Locast cited an exception in United States copyright law that allows retransmission of television signals by non-commercial entities at no charge, aside from that required to maintain the service's operations.

In July 2019, the parent companies of the four major U.S. broadcast networks sued Locast, alleging that the service violated copyright law.

The plaintiffs also alleged that Locast undermined its non-profit status by accepting financial support and promotion from cable and satellite companies.

The networks maintained that Locast gave the carriers an unfair negotiating advantage during carriage disputes that prevented them from retransmitting local programming.

Locast filed a countersuit, arguing that its service complied with the aforementioned exceptions and accusing the networks of colluding to limit the availability of their programming via free-to-air means in order to protect the pay television industry.

In January 2018, Locast went online in New York as a service of the Sports Fans Coalition, a non-profit advocacy group chaired by Goodfriend.

[16] In May 2019, New York Times reporter Edmund Lee wrote that Goodfriend's stated intention to quickly expand Locast nationwide "is basically a dare to the networks to take legal action against him.

[7] On July 31, 2019, The Walt Disney Company, CBS Corporation, NBCUniversal, and Fox Corporation – the respective parent companies of ABC, CBS, NBC, and Fox – filed a lawsuit in the United States District Court for the Southern District of New York seeking a permanent injunction against Locast for infringing on the copyrights of their programming by retransmitting it without permission and compensation.

(The exemption was originally intended to cover third-party translator stations owned by non-profits and other organizations such as municipal and county governments.)

Locast accused the networks of engaging in collusion to effectively require viewers to use pay television services, including intentionally using low-end equipment on station transmitters to provide signals inadequate for serving the entirety of their market, and forbidding affiliates from streaming their programming online.

In their letter, they argued that Locast didn't qualify for a copyright exemption for three reasons: the exemption was intended for local retransmissions, whereas Locast's use of the internet gave it global reach; the service in fact operated for commercial advantage; and that the donations it requested were in fact charges to obtain uninterrupted service.

We are disappointed that the court is enabling this callous profiteering that tramples on Congress’s intent to ensure local communities have access to news that’s important to people regardless of their ability to pay.

[33] On October 28, 2021, the plaintiffs were awarded statutory damages of $32 million under the Copyright Act, payable by Locast's operator, Sports Fans Coalition NY.