Academic journal article Brigham Young University Law Review

I Want My MTV . . . and My ABC, CBS, NBC, and Fox: CBS Broadcasting, Inc. V. EchoStar Communications Corp., the Satellite Home Viewer Act of 1988, and an Argument for Consumer Choice in Distant Network Broadcasting

Academic journal article Brigham Young University Law Review

I Want My MTV . . . and My ABC, CBS, NBC, and Fox: CBS Broadcasting, Inc. V. EchoStar Communications Corp., the Satellite Home Viewer Act of 1988, and an Argument for Consumer Choice in Distant Network Broadcasting

Article excerpt

I. Introduction

Recent advancements in technology have made it possible for American consumers to enjoy more television viewing choices1 than ever dreamed possible only a few years ago.2 With a few clicks of a remote control, a satellite television subscriber has instant access to hundreds of channels3 from around the world, pay-per-view programming, on-demand movies, music channels, and even interactive games and karaoke.4 However, one choice is conspicuously absent: federal law prevents consumers from subscribing to network television stations outside the particular geographic market in which they reside.5 A complex federal statutory scheme-known as the Satellite Home Viewer Act of 1988 ("SHVA")6-prohibits satellite companies from offering their customers "distant networks," or network stations outside a subscriber's market area,7 with the exception of customers who fall within limited circumstances as determined by highly technical criteria.8 This Comment argues that Congress should amend the SHVA to allow American satellite television consumers to legally subscribe to distant network programming.

A recent case, CBS Broadcasting, Inc. v. EchoStar Communications Corp., illustrates how consumers lose under the current regulatory scheme. EchoStar Communications Corporation, dba DISH Network, one of the two major direct broadcast satellite providers in the U.S. market,9 recently lost a protracted court battle with network stations CBS, FOX, NBC, and ABC for copyright violations that arose from EchoStar's widespread transmission of distant networks to ineligible subscribers.10 The network stations claimed that EchoStar systematically allowed ineligible customers to subscribe to distant networks, thereby violating the networks' exclusive rights to control the retransmission of their programs under the Copyright Act.11 In a stinging rebuke, the Eleventh Circuit Court of Appeals held that EchoStar had "engage[d] in a 'pattern or practice'" of providing distant networks to ineligible subscribers in violation of federal law.12 As a result, the court remanded and instructed the district court to issue a nationwide permanent injunction preventing EchoStar from offering distant networks to any of its subscribers, even though around seventy-five percent13 of the approximately 900,00014 affected subscribers were undisputedly eligible to receive distant networks under that same federal law.15

EchoStar's subsequent settlement negotiations failed to save its consumers from the impending injunction. Indeed, after the Eleventh Circuit's ruling, EchoStar continued settlement negotiations with the plaintiffs, and on August 28, 2006, announced that it had reached a $100 million settlement with all of the plaintiffs except the Fox Network.16 Interestingly enough,17 Fox is owned by Rupert Murdoch-who also owns EchoStar's satellite rival, DirecTV.18 Despite the plaintiffs' settlement agreement, on October 20, 2006, the district court rejected the settlement and entered a nationwide permanent injunction to become effective December 1, 2006.19

Thus far, Congess has also failed to rescue EchoStar customers. After the district court rejected the proposed settlement, EchoStar quickly issued a press release and called upon its customers20 to urge congressional action to prevent the impending injunction.21 Angry constituents faced with the prospect of losing their network programming flooded Congress with phone calls,22 and on November 16, 2006, Senator Patrick Leahy (D-VT) introduced a bill, the Satellite Consumer Protection Act of 2006, which would have protected consumers from a disruption in service.23 However, Congress adjourned before considering the proposed legislation,24 and as of this writing has not acted upon it.

Faced with the reality of having to comply with the permanent injunction, EchoStar crafted a clever and seemingly last-second "outsourcing" arrangement that angered broadcasters25 and instigated further litigation. …

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