Pirate radio is the transmission of communications over radio waves by unlicensed amateurs; such broadcasts are illegal because they are not in accordance with FCC transmission requirements.
Originally, radio was generally a lawless free-for-all and the domain of hobbyists and enthusiast experimenters. It was not until the Radio Act of 1912, under President Taft, that amateur radio was regulated to the frequency spectrum, making unlicensed transmissions illegal. The legislation was drafted in response to the sinking of the Titanic, despite the fact that there were no claims that radio had anything to do with the disaster.
The new regulations affected one-way and two-way radio communications in AM, FM shortwave and HAM radio. The new required frequencies, licensing and call signs for amateurs meant that other radio transmissions were outlawed. The act also gave authorities the ability to shut down unnecessary radio in war time. The FCC was created at this time, as the Federal Radio Commission.
Leading up to and into wartime, the U.S. Navy complained that amateur radio interfered with naval communications. They were given the duty of monitoring radio to prevent its use for propaganda against US interests. Once war was declared on Germany in 1917 the government shut down non-essential radio. The Navy declared it illegal to listen to radio; that ban lasted two years. The heavy-handed war time regulations may have fueled the motivation of dissenters to continue with what had become pirate radio in the U.S. as well as abroad.
In the 1960s,a pirate station called Radio Rock broadcast pop and rock music (which the BBC did not play) from an offshore boat. That story was made into a movie The Boat that Rocked (Pirate Radio in the U.S.) Besides free expression and avoiding fees and telecom oversight, pirate radio is sometimes used for communication in disaster zones or when communication over public Internet is disabled or politically unsafe.
Currently, pirate radio is being explored by activist groups such as Anonymous, whose AirChat technology allows individuals to develop pirate radio and enables encryption to protect the privacy of users, which is illegal on radio.
See a short video about pirate radio: