SBCA AND SATELLITE TV PROVIDERS FILE SUIT AGAINST THE U.S. GOVERNMENT, FCC AND U.S. COPYRIGHT OFFICE CHALLENGING SATELLITE MUST CARRY PROVISION
ALEXANDRIA, VA, September 20, 2000 - The Satellite Broadcasting and Communications Association (SBCA) and the nation's two Direct Broadcast Satellite (DBS) television providers, DIRECTV, Inc. and EchoStar Communications, today filed suit in Federal District Court in the Eastern District of Virginia to protect the First Amendment rights of DBS satellite television providers, programming suppliers and current and future satellite television subscribers all across America.
Beginning on January 1, 2002, the Satellite Home Viewer Improvement Act (SHVIA) mandates that once a satellite carrier exercises its editorial discretion to provide the programming of any local television broadcast station within that station's local market, the satellite carrier must, upon request, carry without compensation the signals of every television broadcast station located within that local market. The civil complaint filed today against the United States government, the Federal Communications Commission and the U.S. Copyright Office challenges the must carry provision (47 U.S.C. § 338) and asks that the court find that it is unconstitutional.
"These must carry requirements go far beyond those applicable to cable in dictating the content of a substantial portion of a satellite carrier's programming menu," said SBCA President Chuck Hewitt. "Satellite must carry is a major roadblock to the continued roll-out of local channels in areas outside the largest markets and will deprive Americans in mid-size and smaller markets of local television over their satellite systems. The marketplace should decide what programming satellite companies carry, not a federal mandate.
Our litigation seeks to free up precious satellite capacity to enlarge the number of consumers to whom we can offer local broadcast channels. The must carry regime is a grossly unfair waste of spectrum and does not serve any legitimate governmental purpose, let alone a compelling or important governmental interest. "
SHVIA would force satellite providers to carry numerous local television broadcast stations that they would otherwise choose not to carry because the programming on those stations is of limited interest, duplicative of other programming available on the provider's system or otherwise not in harmony with the provider's overall package of programming or programming objectives. But in order to satisfy these must carry requirements, satellite providers will be able to offer local channels in only the largest television markets. Consumers outside the largest television markets will be deprived of the opportunity to receive their local channels via satellite and denied the benefits of competition enjoyed by consumers in larger markets.
Currently, DIRECTV and EchoStar are offering the local affiliates of the four major national networks (and some popular independent stations) in those markets where they are offering local channels. Under full must carry, DBS providers would have to carry, for example, approximately 23 stations in the Los Angeles designated market area (DMA) and approximately 23 stations in the New York City DMA (Nielsen Station Index, Directory of TV Stations 1999-2000). Being forced to dedicate precious satellite capacity to channels of limited interest in larger markets would mean consumers in markets such as Richmond, VA, and Hartford, CT, would not receive any local broadcast signals via satellite.
The lawsuit contends that Section 338 of SHVIA violates the First Amendment of the United States Constitution because it favors certain local broadcasters over all other programming and it penalizes DBS providers for carrying popular stations by forcing them to carry every station without monetary compensation.
In the Turner cases, the Supreme Court upheld the must carry rules that apply to cable systems because the rules serve the important government interest in preserving local broadcast stations in light of the monopoly power that cable companies could wield against them. Because satellite providers do not possess concentrated local market power, a local broadcast station does not require carriage by a satellite provider to ensure its continued viability. Thus, we believe that the Turner decisions will not dictate the outcome of our case.
"Must carry limits local channel availability and consumer choice," said Odie Donald, president of DIRECTV, Inc. "Quite simply, with must carry DIRECTV will be able to serve only the largest TV markets with local channels. That certainly isn't fair to consumers who reside in mid-size and smaller markets who also deserve a competitive alternative to cable."
The Satellite Broadcasting and Communications Association of America (SBCA) is the national trade organization representing all segments of the satellite industry. It is committed to expanding the utilization of satellite technology for the broadcast delivery of video, data, voice, interactive and broadband services. The SBCA is composed of DBS, broadband, and other satellite service providers, programmers, equipment manufacturers, distributors, retailers, encryption vendors, and national and regional distribution companies.
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