Last Friday, a District Court Judge in Florida denied the request of the National Association of Broadcasters and Echostar Communications to stay a decision of the 11th Circuit Court of Appeals that requires Echostar to stop providing “distant” network TV signals to hundreds of thousands of subscribers nationwide. Several broadcast networks had sued Echostar, claiming that it had violated 17 USC Section 119, which gives satellite companies such as Echostar a compulsory license to import network TV signals from outside a household's viewing area if that household is deemed to be “unserved” by a local TV station. The law basically has two purposes: 1) to ensure that those viewers who cannot receive good network TV signals can receive them and 2) to protect local broadcasters (and their advertisers) from the competition distant signals might provide.
The 11th Circuit found that Echostar engaged in a “pattern and practice” of providing distant signals to those who did not qualify as unserved. As a result, Echostar was given what amounts to the statutory death penalty – the Court ruled that they must cut off distant signal service to all of their customers who received it, including hundreds of thousands of customers to whom they were legally providing service. Echostar and the NAB asked the District Court that was to issue the penalty to delay the final judgment until September 11 so that the two sides could reach a settlement. While courts rarely deny such a joint request, it likely reflected the court's anger at Echostar's business practices and litigation strategy.
I don't want to condone the behavior that got Echostar to this point – the court rightfully came down on the company hard for playing fast and loose with the law. But in the age of 500 channels, Slingbox, the Internet and cries of “regulatory parity” from all sectors of the mass media, including broadcasters, it might be time to reexamine this law to see if it still makes sense. I grew up in New York and still am a diehard fan of its local professional sports teams. Why shouldn't I be able to watch New York's Channel 2 on Sunday to catch the NY Jets football games? Or catch Chuck Scarborough and Sue Simmons (WNBC-NY) instead of Jim Vance and Doreen Gentsler (NewsChannel 4 – DC)? If my local station wants my attention, let them compete for it – rather than rely on protectionist laws that limit viewer choice.
Unfortunately, the distant signal law is only one of several that shield the broadcast industry from competition. The first, and perhaps most important, gives them valuable public airwaves for free – supposedly in exchange for programming that serves the community. The public has been getting the short end of that deal for decades now. Then there are the “must carry” laws, which force cable operators to carry local signals. Satellite providers are subject to a similar law – if they carry one local station, they have to carry all of them.
Broadcasters' effort to obtain government protectionism does not stop there – witness the NAB's support of the WIPO Broadcasters Treaty which would give US broadcasters a fifty year intellectual property like right in their signal. And while they are holding off for now, broadcasters are grumbling about the Slingbox, which allows viewers to watch their local stations remotely on a computer. What local broadcaster could possibly dislike a technology that permits their local viewers to watch their programming and advertisers anywhere and at anytime?
In the short term, there will probably be a legislative effort to ensure that those Echostar-served households that were legally entitled to distant signals continue to receieve them. While we would favor any result that protects innocent consumers, we hope that Congress might take the opportunity to question the necessity of the distant signal law and other laws that protect broadcasters from competition.