CBS Broadcasting v. EchoStar: The Satellite Home Viewer Act and Satellite Retransmission of Distant Network Signals

CBS Broadcasting v. EchoStar: The Satellite
Home Viewer Act and Satellite Retransmission of
Distant Network Signals
Updated June 5, 2007
Daniel Schuman
Legislative Attorney
American Law Division

CBS Broadcasting v. EchoStar: The Satellite Home
Viewer Act and Satellite Retransmission of Distant
Network Signals
Summary
On May 23, 2006, the Eleventh Circuit Court of Appeals ordered the District
Court for the Southern District of Florida to enjoin EchoStar Communications
Corporation from retransmitting all programming originating on any station affiliated
with ABC, Inc.; CBS Broadcasting, Inc.; Fox Broadcasting Co.; or National
Broadcasting Co. The district court complied, rejecting EchoStar’s last-minute
arguments and partial settlement agreement and ordering the injunction imposed
effective December 1, 2006. At issue before the Eleventh Circuit was whether
EchoStar had violated the Satellite Home Viewer Act (SHVA), as amended, which
grants a limited statutory license to satellite carriers transmitting distant network
signals to private homes if the subscribers cannot receive local signals, and the scope
and consequences of violating SHVA.
The court of appeals determined that EchoStar engaged in a pattern or practice
of violating SHVA on a nationwide scale and, consequently, that SHVA required the
court to impose a nationwide injunction against EchoStar for its improper
retransmission of programming. This was a different legal conclusion than that
reached by the district court, which had concluded that because of EchoStar’s
cessation of the violation, SHVA did not require “pattern or practice” liability, and
the court consequently had discretion to order EchoStar to re-analyze its subscriber
base, in compliance with SHVA, and to limit termination to subscribers found
ineligible under the court-supervised analysis.
Subsequent to the district court’s orders implementing the court of appeals’
decision, multiple bills were introduced in the 109^th Congress — S. 4067, S. 4068,
S. 4074, S. 4080, H.R. 6402, H.R. 6340, and H.R. 6384 — that would have allowed
EchoStar to recommence retransmission of distant network programming under^th
varying circumstances. Several bills have been introduced in the 110 Congress:
H.R. 602, S. 124, S. 258, and S. 760.

Contents
In troduction ......................................................1
The Satellite Home Viewer Act: Satellite Retransmission of
Distant Network Signals to Unserved Households....................2
Factual Findings Regarding EchoStar’s Violation of Federal Law............4
The Court of Appeals’ Decision......................................5
The District Court’s Orders Enforcing the Court of Appeals’ Decision........7
Congressional Action ..............................................8
110^th Congress................................................8
S. 124...................................................8
S. 258...................................................8
H.R. 602.................................................8
S. 760...................................................8^th
109 Congress................................................8
S. 4067 and H.R. 6402......................................8
S. 4068 and H.R. 6340......................................8
S. 4074..................................................9
S. 4080 and H.R. 6384......................................9

CBS Broadcasting v. EchoStar: The Satellite
Home Viewer Act and Satellite
Retransmission of Distant Network Signals
Introduction
On May 23, 2006, the Eleventh Circuit Court of Appeals ordered the District
Court for the Southern District of Florida to impose an injunction on EchoStar
Communications Corporation¹ to cease retransmitting all programming originating
on stations affiliated with ABC, Inc.; CBS Broadcasting, Inc.; Fox Broadcasting Co.;
or National Broadcasting Co.² The district court complied in two orders, one
granting a motion for entry of a permanent injunction and denying a settlement
agreement,³ the other ordering the implementation of the injunction effective
December 1, 2006.⁴ At issue before the Eleventh Circuit was whether EchoStar had
violated the Satellite Home Viewer Act (SHVA),⁵ as amended, which grants a
limited statutory license to satellite carriers transmitting distant network signals to
private homes if the subscribers reside in unserved households, and the scope and
consequences of that violation.⁶

¹ Doing business as DISH Network.
² CBS Broadcasting v. EchoStar, 450 F.3d 505 (11^th Cir. 2006).
³ Order Granting Motion for Entry of Injunction; And Denying Joint Stipulation to Enter
Consent Judgment and Approve Settlement Agreement, Case No. 98-2651-CIV-
DIMITROULEAS (October 20, 2006).
⁴ Order of Permanent Injunction, Case No. 98-2651-CIV-DIMITROULEAS (October 20,

2006).

⁵ Satellite Home Viewer Act of 1988 (“SHVA”), P.L.100-667, title II, 102 Stat. 3935,
codified at 17 U.S.C. § 119 (1988); amended by the Satellite Home Viewer Improvement Act
of 1999 (“SHVIA”), P.L. 106-113, 113 Stat. 1501 (1999); reauthorized by the Satellite
Home Viewer Extension and Reauthorization Act (“SHVERA”), P.L. 108-447, 118 Stat.
2809 (2004). For more information on the Satellite Home Viewer Act, as amended, see CRS
Report RS22175, Satellite Television: Provisions in SHVERA Affecting Eligibility for
Distant and Local Analog Network Signals, by Julie Jennings. The FCC’s website on
SHVERA can be found at [http://www.fcc.gov/mb/policy/shvera.html]. The FCC’s
extensive fact sheet on Television Broadcast Channels on Satellite can be found at
[ h t t p : / / www.f cc.go v/ mb / pol i c y/ shve r a .doc] .
⁶ CBS Broadcasting v. EchoStar, 450 F.3d 505, 508 (11^th Cir. 2006). See infra for
explanations of “unserved household” and “distant network signals.”

The court of appeals held that because EchoStar was unable to disprove it had
engaged in a “pattern or practice” of SHVA violations on a nationwide scale,⁷ the
terms of the Satellite Home Viewer Act required that the court impose a nationwide
injunction against EchoStar’s improper retransmission of distant network
programming.⁸ This differs from the decision of the district court, which had
concluded that so long as EchoStar was currently complying with SHVA, the court
had discretion to order EchoStar to re-analyze its subscriber base, supervised by the
court to ensure compliance with SHVA, and terminate all subscribers who were
ineligible to receive the signals.⁹
This report briefly describes the Satellite Home Viewer Act, as amended,
through the lens of the Eleventh Circuit’s ruling regarding a satellite provider’s
retransmission of programming originating on distant network affiliate stations to
persons who live in “unserved” households.¹⁰ It then describes the facts
underpinning the court’s decision, followed by the main legal issues the court
addressed and a discussion of the district court’s implementation of the court of
appeals’ decision. The report concludes with possible legislative action.
The Satellite Home Viewer Act: Satellite
Retransmission of Distant Network Signals to
Unserved Households
The Satellite Home Viewer Act of 1988 (SHVA), as amended, grants satellite
carriers like EchoStar a compulsory license to retransmit copyrighted “distant
network programming” to “unserved households.”¹¹ The purpose behind granting the
compulsory license is to “satisfy the public interest in making available network
programming in these (typically rural) areas, while also respecting the public interest
in protecting the network-affiliate distribution system.”¹²

⁷ Id. at 523.
⁸ Id. at 527.
⁹ CBS Broadcasting v. Echostar, 276 F. Supp. 2d 1237, 1256 (S.D. Fla. 2003).
¹⁰ For an overview of regulations that affect local programming, see CRS Report RL32641,
“Localism”: Statutes and Rules Affecting Local Programming on Broadcast, Cable, and
Satellite Television, by Charles Goldfarb.
¹¹ As a general rule, owners of copyrights in television programs enjoy the exclusive right
to publicly perform those programs and to license others to do so. The television networks
own the exclusive copyrights to numerous network television programs that EchoStar, a
satellite broadcast company, retransmits to certain subscribers. CBS Broadcasting v.^th
EchoStar, 265 F.3d 1193, 1201 (11 Cir. 2001). This retransmission is referred to in the
statute as “secondary transmission.” See 17 U.S.C. § 119(d)(7) (incorporating by reference
17 U.S.C. § 111(f)). 17 U.S.C. § 119 (2006). This permission is granted in return for a
license fee of $0.15 per subscriber per month. CBS Broadcasting v. Echostar, 276 F. Supp.

2d at 1254.

¹² CBS Broadcasting v. EchoStar, 450 F.3d 505, 508 n. 2 (11^th Cir. 2006).

Distant network programming is programming that a satellite television
subscriber receives from a network-affiliated broadcast station located outside his or
her market area.¹³ An example is a person who lives in Fort Lauderdale but receives
an ABC, CBS, Fox, or NBC network station from New York City.¹⁴ An unserved
household, for the purposes of this discussion, is one in which a subscriber (1) cannot
receive an over-the-air television signal at a certain level of signal intensity, (2) has
received a waiver from the local affiliated network station, or (3) is grandfathered
in.¹⁵
Under SHVA, the satellite carrier bears the burden of proving its subscribers
reside in unserved households.¹⁶ If it fails to provide sufficient evidence that a
household is unserved, the satellite carrier may be held liable for damages and
injunctive relief.¹⁷ For households receiving an over-the-air television signal, SHVA
permits two methods of determining whether a household is unable to receive a
signal of requisite strength: the use of the “accurate measurements method” and the
“accurate predictive model.”¹⁸ The accurate measurements method requires actual
physical measurements to determine the strength of the television signal at the
subscriber’s residence, performed in accordance with statutory and regulatory
requirements.¹⁹ By contrast, the accurate predictive model, or ILLR,²⁰ does not
require home visits, yet allows the satellite carrier, through a computer model, to
presumptively establish that a household cannot receive a sufficient signal and is
therefore unserved.²¹
Penalties for violating SHVA vary, depending on whether they are classified as
“individual violations” or “patterns of violations.” An individual violation occurs

¹³ Id. at 509 n. 1.
¹⁴ Id.
¹⁵ “Unserved household” is statutorily defined at 17 U.S.C. § 119(d)(10) and more precisely
summarized in CBS Broadcasting v. EchoStar at 510. SHVA identifies five categories of
unserved households. The other two categories regard subscribers who receive signals
through a satellite dish on a commercial truck or recreational vehicle or transmissions by C-
band services prior to October 31, 1999.
¹⁶ 17 U.S.C. § 119(a)(7)(D).
¹⁷ 17 U.S.C. § 119(a)(7).
¹⁸ The only definitive way to determine whether a household is unserved is to use the
accurate measurements model, which requires onsite testing. However, if a satellite carrier
uses the less expensive accurate predictive model, ILLR, courts will assume the results of
that model are correct unless a television network provides evidence to the contrary. CBS
Broadcasting v. Echostar, 450 F.3d 505, 521-22.
¹⁹ See 17 U.S.C. 119(a)(2)(B)(ii)(II).
²⁰ An acronym for Individual Location Longley-Rice propagation model.
²¹ 17 U.S.C. 119(a)(2)(B)(ii)(I). For details on implementing the accurate predictive model,
see Satellite Delivery of Network Signals to Unserved Households for Purposes of the
Satellite Home Viewer Act: Part 73 Definition and Measurement of Signals of Grade B
Intensity, 47 CFR 73, FCC 99-14 (1999) (available at [http://hraunfoss.fcc.gov/edocs_
public/attachmatch/FCC-99-14A1.pdf]).

where there is a willful or repeated retransmission to a subscriber who is not eligible
to receive the transmission.²² By contrast, a pattern of violations occurs when a
satellite carrier engages in a willful or repeated pattern or practice of delivering
distant network service to subscribers who are not eligible to receive the
transmission.²³ A district court has broad discretion to remedy individual violations
but has less discretion in its choice of remedy for a pattern or practice of violations.²⁴
Assuming a court finds a willful or repeated pattern or practice of violations, it
must order a permanent injunction barring retransmission by the satellite carrier of
any primary transmissions from any network station affiliated with the same network,
and may order damages not to exceed $250,000 for each six-month period during
which the pattern or practice of violations occurred.²⁵ If the violations occurred on
a “substantially nationwide basis,” the court must order a permanent injunction
against the satellite carrier encompassing “the primary transmissions of any primary
network station affiliated with the same network”²⁶ — a nationwide ban. If the
violations occurred on a “local or regional basis,” the court must order a permanent
injunction against the satellite carrier that bars the retransmission “in that locality or
regi on.”²⁷
Factual Findings Regarding EchoStar’s Violation of
Federal Law
At issue was whether EchoStar willfully or repeatedly violated SHVA by
retransmitting distant network signals to ineligible satellite television subscribers
from 1996 to 2003, and if so, whether the nature of the violations was best classified
as “individual” or “pattern or practice” violations, thereby triggering different
penalties. The district court examined the methodology by which EchoStar classified
a household as unserved and the percentage of the carrier’s subscriber base
inappropriately classified as eligible for service. The court concluded that from 1996
to 2002, EchoStar used improper methodology²⁸ to assess whether a person resided

²² 17 U.S.C. § 119(a)(7)(A).
²³ 17 U.S.C. § 119(a)(7)(B).
²⁴ 17 U.S.C. § 117 (a)(7)(B)(i-ii) (“ ... the court shall order ...”)
²⁵ 17 U.S.C. § 119(a)(7)(B).
²⁶ 17 U.S.C. § 119(a)(7)(B)(i).
²⁷ 17 U.S.C. § 119(a)(7)(B)(ii).
²⁸ From 1996 to 1998, EchoStar offered distant network programming through an agreement
with another satellite provider, PrimeTime24 Joint Venture, which evaluated signal strength
based on a consumer’s evaluation of his or her signal quality. From 1998 to 1999, EchoStar
evaluated new subscriber eligibility using a “red-light/green-light” method that determined
eligibility based on location in an approved zip code. From 1999 to April 2002, EchoStar
used a modified version of the ILLR model to determine subscriber eligibility, including
consideration of Nielsen-defined “designated market areas” and interference with signal
strength. From April 2002 until the district court’s ruling in June 2003, the district court
(continued...)

in an unserved household, with the result that 60% or more²⁹ of subscribers were
ineligible for service.³⁰
Because EchoStar did not satisfy its statutory burden of proving it only
retransmitted distant network signals to unserved households, the district court held
that EchoStar’s conduct constituted willful or repeated copyright infringement,
actionable under the part of SHVA that governs “individual violations.”³¹ The
district court did not reach a conclusion as to whether EchoStar engaged in a pattern
or practice of violations, which would trigger a permanent injunction, because “no
pattern or practice currently exists that would warrant such an extreme sanction.”³²
The Court of Appeals’ Decision
The court of appeals overturned the district court’s legal conclusion regarding
EchoStar’s punishment, holding that the district court was indeed obligated to issue
a nationwide permanent injunction against EchoStar’s retransmission of network
programming as a consequence of “the inescapable conclusion, based on the district
court’s findings, that EchoStar did engage in a ‘pattern or practice’ of violations.”³³
The district court erroneously concluded that the legal standard for “pattern or
practice” liability required EchoStar to be currently engaged in violating SHVA.³⁴
The court of appeals held that the permanent injunction required under “pattern or
practice” must be imposed, so long as a pattern or practice of statutory violations³⁵
occurred at some point in time. The court then proceeded to evaluate whether
EchoStar had engaged at any time in a pattern or practice of violating SHVA.
According to the court, the standard for concluding “pattern or practice” liability
under SHVA is “whenever a satellite carrier fails to carry its burden of proving

²⁸ (...continued)
concluded that EchoStar undertook significant measures to comply with SHVA.
²⁹ During the Prime24 Subscribers period, at least 78% of the 331,586 subscribers were
ineligible for service. Despite a promise by EchoStar’s CEO, the district court found no
evidence that EchoStar terminated service to any of these ineligible subscribers for
compliance-related purposes. During the “red-light/green-light” time period, the court noted
that of the CBS distant programming subscribers signed-up during this period, 69% received
a signal of sufficient strength to no longer qualify as an unserved household on that basis.
Under the September 1999 subscriber list, 72% of EchoStar’s distant network subscribers
(630,000 in total) were predicted to be disqualified based on signal strength, absent other
factors. Under the April 2002 subscriber list, hundreds of thousands of subscribers were
found to be ineligible to qualify as an unserved household on the basis of signal strength.
³⁰ CBS Broadcasting v. EchoStar, 450 F.3d at 512-515.
³¹ Id. at 516. See 17 U.S.C. § 119(a)(7)(B)(i).
³² Id. at 517 (quoting CBS Broadcasting v. Echostar, 276 F. Supp. 2d at 1254).
³³ Id.
³⁴ Id.
³⁵ Id. at 524.

eligibility [for distant network service] on a sufficient scale, and to a sufficient
degree, that [a court] can presume that the satellite carrier is engaging in ‘pattern or
practice’ of serving ineligible subscribers.”³⁶ Looking at the legislative history of
SHVA, the court determined that a threshold of 20% of subscribers being ineligible
for service is a relevant marker for pattern or practice analysis.³⁷
The court of appeals, believing “that there is no other possible conclusion that
can be drawn from the district court’s findings of fact,” determined that EchoStar’s
prior conduct did constitute a pattern or practice of violations.³⁸ The court based this
conclusion on a three main factors. First, EchoStar’s three-and-a-half year history
of using inadequate procedures for assessing subscriber eligibility.³⁹ Second,
EchoStar’s exceeding the 20% threshold of unlawful subscribers nationwide.⁴⁰
Third, EchoStar’s pattern of behavior, about which the court stated, “we have found
no indication EchoStar was ever interested in complying with the Act.”⁴¹ The court
also denied all but one of EchoStar’s 17 claims of error.⁴²
In addressing EchoStar’s assertions that the court had discretion to determine
a remedy for the violations, the court found that “Congress unequivocally stated a
purpose to restrict the courts’ traditional equitable authority upon a finding of a
‘pattern or practice.’”⁴³ Because the act instructs that a court shall order a permanent
injunction and may order statutory damages, the court found there to be “no
ambiguous statutory language in the SHVA ... [or] any legislative history that would
indicate that the remedial measure chosen by Congress is anything but mandatory.”⁴⁴
As a result, on August 15, 2006, the court of appeals ordered the district court to
issue a nationwide permanent injunction barring the retransmission of distant
network programming pursuant to the act’s statutory license.⁴⁵

³⁶ Id.
³⁷ Id.
³⁸ Id. at 525. The court stated “[i]f these findings do not describe a ‘pattern or practice’ of
violations, we do not know what does.” Id. at 526.
³⁹ Id.
⁴⁰ Id. “The best case scenario ... indicates that, on a nationwide basis, EchoStar is
presumptively providing illegal service to 26.5% of its subscribers receiving ABC distant
network programming, 26.9% for CBS, 20.2% for Fox, and 28.1% for NBC.”
⁴¹ Id. at 526.
⁴² Id. at 523. The court noted the one error, the erroneous conclusion that the act prohibits
the use of multiple ILLR vendors, had no effect on the outcome. Id.
⁴³ Id.
⁴⁴ Id. at 525.
⁴⁵ Id. at 526. Note: there is nothing in the court order to indicate that non-continental states
are excluded from the nationwide injunction.

The District Court’s Orders Enforcing the Court of
Appeals’ Decision
Ten days after the court of appeals decision, EchoStar and the Affiliate
Associations⁴⁶ filed a Notice of Settlement between those parties in the district court.
On August 31, Fox Broadcasting Company (Fox) filed a motion for entry of a
nationwide permanent injunction in accordance with the court of appeals’ decision.
The district court issued two orders in response to Fox’s motion on October 20,

2006.⁴⁷

EchoStar and the Affiliate Associations (the Settling Parties) made three
arguments against the court’s imposition of the injunction and in favor of granting
the proposed consent agreement. First, the Settling Parties argued that Fox lacked
standing to obtain relief because the act only applies to networks, not network
stations, and Fox abandoned its cross-appeal to the court of appeals, thereby waiving
its right to seek an injunction. Second, they argued that the nationwide permanent
injunction Fox sought was overly broad, and considering the agreement between the
Settling Parties, the court had discretion to enter more narrow relief. Finally,
Echostar argued that the entry of a nationwide permanent injunction would cause
manifest injustice to the parties and EchoStar’s customers. The district court rejected
all three arguments.
The district court concluded that the question of Fox’s standing was irrelevant
because the court had “an obligation to implement the mandate issued by the
Eleventh Circuit even without the request of any party.” The district court also found
that, according to controlling case law, it was unable to review or alter the mandate
from the court of appeals, as the parties’ settlement agreement did not present new
evidence or an intervening change in controlling law, the only circumstances under
which the district court held it would have discretion to review the court of appeals’
mandate. The district court also concluded that implementing the law would not
constitute “manifest injustice,” as it would be “neither clearly erroneous nor contrary
to law,” the standard for a court making that finding.
As a result, the district court granted an Order of Permanent Injunction,⁴⁸
effective December 1, 2006, that permanently enjoined and restrained EchoStar from
retransmitting “a performance or display of a work embodied in the primary
transmission of any network station affiliated with ABC, Inc., CBS Broadcasting,
Inc., Fox Broadcasting Company, or National Broadcasting Co.”

⁴⁶ ABC Television Affiliates Association, CBS Television Network Affiliates Association,
FBC Television Association, NBC Affiliates Association.
⁴⁷ Order Granting Motion for Entry of Injunction; And Denying Joint Stipulation to Enter
Consent Judgment and Approve Settlement Agreement, Case No. 98-2651-CIV-
DIMITROULEAS (October 20, 2006). Order of Permanent Injunction, Case No. 98-2651-
CIV-DIMITROULEAS (October 20, 2006).
⁴⁸ Id.

Congressional Action
110^th Congress
S. 124. Introduced by Senator Allard and substantively identical to S. 4074
introduced in the 109^th Congress, section 2 would allow satellite broadcasters to
retransmit signals originating in Denver to subscribers in two counties in Colorado
that are in a local market comprised principally of counties located in another state.
S. 258. Introduced by Senator Sununu, co-sponsored by Senator Gregg, and
identical to S. 4068 introduced in the 109^th Congress, it generally would allow a
satellite broadcaster to continue retransmitting, despite the injunction, in states with
a single full-power network station.
H.R. 602. Introduced by Representative Boren, it allows subscribers to receive
the secondary transmissions of network stations located in Oklahoma so long as they
either reside in Oklahoma but do not receive the secondary transmission of any
network station located in Oklahoma or live in another state that contains a local
market that includes some Oklahoma residents and the subscriber elects to receive
the secondary transmission originating in Oklahoma.
S. 760. Introduced by Senator Salazar, it allows subscribers in certain counties
in Colorado to receive secondary transmissions of network stations located in the
state capital. It also permits subscribers who are located in a designated market area
comprised primarily of counties outside of Colorado to receive retransmission of
broadcast signals upon FCC approval and broadcaster agreement.
109^th Congress
Multiple pieces of legislation were introduced in the second session of the 109^th
Congress, subsequent to the district court’s order implementing the permanent
injunction.
S. 4067 and H.R. 6402. Introduced by Senator Leahy and joined by 15 co-
sponsors⁴⁹ in the Senate and introduced by Representative Mollohan and co-
sponsored by Representative Rahall in the House, it would have allowed in several
limited circumstances, subject to additional conditions, a satellite provider to
continue providing distant network service despite a court’s permanent injunction.
S. 4068 and H.R. 6340. Introduced by Senator Sununu and cosponsored by
Senator Gregg in the Senate and introduced by Representative Bass and cosponsored
by Representative Bradley in the House, it generally would have allowed a satellite
broadcaster to continue retransmitting, despite the injunction, in states with a single
full-power network station.

⁴⁹ Senators Akaka, Allard, Bingaman, Byrd, Clinton, Ensign, Enzi, Inouye, Johnson,
Lincoln, Pryor, Roberts, Rockefeller, Salazar, and Snowe.

S. 4074. Introduced by Senator Allard, the relevant portion, section 2, with
some caveats, would have allowed subscribers in two counties in Colorado to choose
to receive transmissions of any network station located in Denver, regardless of
whether they would otherwise qualify as an unserved household.
S. 4080 and H.R. 6384. Introduced by Senators Stevens and cosponsored by
Senators Allard, Ensign, and Murkowski, in the Senate and introduced by
Representative Boucher and joined by 18 co-sponsors⁵⁰ in the House, it would have
permitted a court to approve a settlement agreement reached by at least one plaintiff
and one defendant in litigation that resulted in the issuance of a permanent injunction.

⁵⁰ Representatives Bass, Boren, Cubin, Deal, Doolittle, Doyle, Filner, Goodlatte, Herger,
Lofgren, Mollohan, Pickering, Rahall, Stearns, Stupak, Terry, Thompson and Walden.