The Hindu Business Line : `Wrong signals'

A posting dated May 25 on www.aecnewsroom.com informed that the National Association of Broadcasters (NAB) in the US celebrated an appeals court ruling that prevented EchoStar from transmitting distant network TV signals to its satellite subscribers.

"The ruling, which favoured local affiliates of the ABC, CBS, FOX and NBC networks, affirmed an earlier verdict by the 11th Circuit Court that prevented EchoStar from delivering distant network broadcasts typically from New York and Los Angeles to areas without local channels by the satellite provider," noted the communiqué.

One further learns that the court had found that EchoStar's DISH Network illegally provided distant network signals to more than 6 lakh `ineligible homes', in violation of copyright protections for TV stations outlined in the Satellite Home Viewer Improvement Act (SHVIA). "However, the ruling also acknowledged that the illegal subscriber totals were several years old and may have changed as EchoStar has migrated viewers over to legal local-into-local TV packages."

To know more, let us catch up with the 44-page judgment dated May 23. The case that came up before Tjoflat and Hill, Circuit Judges, and Mills, District Judge, involved claims by network stations, such as CBS Broadcasting and Fox Broadcasting Company, and network affiliate associations such as ABC Television Affiliates Association, CBS Television Network Affiliates Association, FBC Television Association, and NBC Television Affiliates Association.

These companies claimed that the defendant EchoStar, a satellite carrier doing business as DISH Network, was retransmitting their programs to `served' households and thereby infringing their exclusive right, under the Copyright Act, to control the retransmission of their programs.

A footnote mentions that as of April 2002, EchoStar provided satellite television services to over nine million people in the US; it provided distant network programming to about 1.2 million subscribers. "Headquartered in Englewood, Colorado, EchoStar Communications Corporation is a public company with approximately 20,000 employees. The Company and its subsidiaries deliver Direct Broadcast Satellite (DBS) television products and services to customers worldwide," is a snatch from `about us' on www.dishnetwork.com.

"EchoStar's story began in 1980 when the Chairman and CEO, Charlie Ergen, entered the satellite television industry as a distributor of C-band TV systems." Today, the company has a fleet of nine satellites, with a capacity to provide hundreds of channels of digital video, audio and data services via DISH Network service to homes, businesses and schools throughout the US.

Unserved, served

The text of the judgment begins with a mention of the Act that preceded SHVIA (of 1999): The Satellite Home Viewer Act of 1988 (SHVA). This gives satellite carriers a compulsory, statutory licence to transmit copyrighted distant network programming to `unserved households,' a phrase that means "households unable to receive network programming at a specified level of intensity through the use of conventional rooftop antennas." SHVIA defines `unserved households' by dividing them into five categories.

According to SHVIA amendment, courts can use two methods to decide if a household is served or unserved. These are the `accurate measurements' method, and the `accurate predictive model' method. The first requires actual physical measurements to determine the strength of the television station's signal at the subscriber's residence. These measurements must follow the procedures elaborated in law, which include the measuring of the signal intensity at a "minimum of five locations as close as possible to the specific site where the site's receiving antenna is located."

The second, that is `accurate predictive model' for determining signal intensity is "the Individual Location Longley-Rice (ILLR) model set forth by the Federal Communications Commission (FCC)," explains the judgment. While the second method avoids having to make time-consuming physical measurements of the signal intensity at a subscriber's residence, `ILLR determinations are nothing more than presumptive'.

Burden of proof

The Act makes abundantly clear that it is the satellite carrier who bears the burden of proving that its subscribers are, in fact, unserved, pointed out the court. Thus, when network stations alleged that EchoStar was retransmitting their programs to `served' households, it became necessary for EchoStar, as the satellite carrier, to provide additional evidence that the challenged subscribers are unserved.

Draconian it may seem, but a satellite carrier may be found to have violated the Act even if a court does not find that its subscribers are `served.' A violation occurs so long as a carrier does not satisfy its burden of proving that its subscribers are `unserved', insisted the court. The Act contemplates two categories of violations as it relates to the secondary transmission of distant network service to served households: `individual violations' and `patterns of violations'.

A district court has broad discretion to remedy the first category of violation. But where the violation has a wilful or repeated pattern, the Act instructs the court to order a permanent injunction barring the secondary transmission by the satellite carrier, for private home viewing, of the primary transmissions of any primary network station affiliated with the same network. Also, the court may order statutory damages not exceeding $2,50,000 for each six-monthperiod during which the pattern or practice was carried out.

At the district court, the plaintiffs had provided affirmative evidence, in the form of expert testimony, and ILLR analyses of EchoStar's subscribers at various points in time. These demonstrated that EchoStar was providing distant network service to ineligible households. In response, though, EchoStar had produced expert evidence that the court found to be lacking credibility.

Red-light area

The sub-head may seem weird, but that's from a system EchoStar used for evaluating new-subscriber eligibility: `red-light/ green-light method.' Under this system, each zip code was designated as either a red-light or a green-light zip code based on predicted signal strength, explains the court verdict. "A household in a red-light area was presumptively ineligible for service."

At the court EchoStar claimed that it refused to sign up subscribers who lived in red-light zip codes unless the subscribers obtained a valid waiver from the network station. But no real evidence was presented before the district court that EchoStar's determination of whether zip codes were red-light or green-light areas was reasonably calculated to prevent signups of ineligible subscribers. Also, the court found that EchoStar's customer service representatives were able to override the red-light/green-light designations. "Even if a subscriber was in a red-light zip code, a customer service representative still had discretion to sign up that subscriber for distant network programming."

Three factors in ILLR

Since 1999, EchoStar began using the ILLR model to determine subscriber eligibility Echostar's ILLR methodology involved the following three relevant factors:

Until October 2000, EchoStar utilised a `DMA Rule' by which it only used the ILLR model to consider the signal strength of network stations in a given household's Nielsen-defined designated market area (DMA). "In other words, even if a household received a Grade B or higher signal from network stations outside a household's DMA, EchoStar would consider it potentially unserved."

EchoStar included interference in its ILLR analyses until January 2002. "Incorporating interference in the ILLR analysis can potentially result in weaker predicted signal strength as the model would then factor in the predicted presence of interfering signals from other stations," explains a footnote.

Finally, EchoStar utilised two vendors, viz. Decisionmark and Dataworld, for its ILLR analysis. "So long as one model indicates that a household cannot receive a Grade B signal, EchoS

The decision of the appeals court was categorical. "We come to the unavoidable conclusion that EchoStar engaged in a `pattern or practice' of SHVA violations," it said. "We hold that the district court is required to issue a nationwide permanent injunction barring the provision of distant network programming pursuant to the Act's statutory licence," ruled the court. The verdict is a valuable read for the avid.

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