EchoStar’s Distant Signals on Bubble in 2 Courts
The 11th Appeals Court, Atlanta, and the U.S. Appeals Court, D.C., are weighing cases centering on DBS delivery of distant network signals -- EchoStar’s in particular. At the 11th Circuit sits an EchoStar petition to rehear en banc a May order that EchoStar cut distant network signals nationwide for abuse of distant signal rules. And at the D.C. Appeals Court is an EchoStar challenge of the formula the FCC has long used to judge household eligibility for distant network signals -- the Individual Location Longley- Rice (ILLR) model.
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The D.C. is expected to rule first, before new law clerks start at month’s end, DBS attorneys said. The opinion has been a long time coming; oral arguments occurred in Dec. (CD Dec 13 p10). EchoStar officials wouldn’t comment on the case.
The 2 distant signal cases aren’t tied directly, but do relate on practical terms, said DBS attorneys we spoke with. If the D.C. Appeals Court overturns the FCC distant signal formula, that could muddy the 11th Circuit decision, we're told. If FCC use of ILLR is affirmed, nothing will change. Likewise, if the 11th Circuit’s nationwide injunction is upheld, it won’t matter what ILLR looks like, because EchoStar couldn’t serve customers with distant signals regardless.
EchoStar sued the FCC over the ILLR model, used to gauge over-the-air TV signal strength and whether a household is “unserved” by local TV, saying the model doesn’t account for buildings, trees and other clutter. Households the FCC deems “unserved” are eligible to get network TV stations from their DBS provider. Congress required the FCC to weigh land use variables in predicting TV signal coverage in the Satellite Home Viewer Improvement Act (SHVIA). EchoStar said the revised FCC model is blind to land use. The FCC said the model is reliable and, as written, is as accurate as possible.
The Atlanta court in May found EchoStar illegally provided distant network signals to 630,000-plus ineligible homes, violating TV stations’ copyright protections under the Satellite Home Viewer Act (SHVA). A 3-judge panel unanimously required a federal district court issue a nationwide permanent injunction barring provision of distant network programming. Such an injunction would cut distant network signals for all Dish Network subscribers -- even customers legally qualifying for the networks to import just one missing affiliate.
In June, EchoStar appealed the ruling with its pending petition for rehearing en banc. EchoStar challenged the court’s broad injunction, terming it a “death knell” that will “adversely impact hundreds of thousands of innocent subscribers.” Among other arguments, EchoStar claimed the Appeals Court substituted its own factual findings for the District Court’s “in contradiction of controlling precedent.” EchoStar asked the court to vacate the findings.
Whether the 11th Circuit takes up the case en banc is “questionable,” a DBS attorney we spoke with said: “It would be extremely rare, with one caveat -- the notion that the Appeals Court order mandated an injunction without findings of fact.” Meantime, EchoStar is at work in other arenas trying to fix the distant signals problem so consumers aren’t harmed, DBS officials said. Distant signal negotiations may be underway with broadcasters, they said.