Federal law does not bar satellite television provider EchoStar Communications Corp. from leasing a transponder to another company to transmit network signals, a U.S. appeals court ruled Monday.
CBS Corp.'s CBS Broadcasting subsidiary, News Corp.'s Fox network and other major network affiliate groups sued EchoStar 10 years ago in South Florida to prevent the Englewood, Co.-based company, which operates the DISH satellite network, from providing distant network signals to customers who can receive local affiliates' broadcasts through regular antennas.
The Satellite Home Viewer Act of 1988 allowed carriers such as EchoStar to provide secondary transmissions of copyrighted distant network programming to "unserved households," those that could not otherwise receive the signals.
The lawsuit claimed that EchoStar was infringing on network copyrights by providing the signals to "served" households as well.
After a two-week bench trial in 2003, the district court found that EchoStar retransmitted network programs to hundreds of thousands of served homes, which it called "willful or repeated" copyright infringement. That ruling was upheld by the 11th U.S. Circuit Court of Appeals, and the U.S. Supreme Court declined to consider an appeal in January 2007.
According to court documents, EchoStar complied with an injunction that went into effect Dec. 1, 2006, by disconnecting distant network channels to about 900,000 customers _ at a loss of $25 million a year.
Just before the injunction took effect, the company leased a transponder on its satellite to National Programming Service.
Under the lease agreement, NPS pays EchoStar $150,000 per month. EchoStar continues to run its own business by retransmitting local affiliate programming to subscribers in the respective affiliate's area, but it no longer has control over distant network programming provided by NPS and does not share in the revenue or profit, the court opinion said.
The networks challenged the arrangement with NPS, but a three-judge 11th Circuit panel said Monday that it is legal.
"Put simply, EchoStar is out of the distant network programming business," wrote Circuit Judge Charles R. Wilson, joined in the opinion by Senior Judge Emmett Ripley Cox and Circuit Judge Pasco M. Bowman II of the 8th Circuit.
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