SBCA files suit

Charges that satellite must-carry is unconstitutional

By Deborah McAdams -- Broadcasting & Cable, 9/25/2000

Satellite operators are taking the federal government to court over the satellite must-carry rule, saying it is unconstitutional.

While satellite broadcasters fought hard for the right to carry local stations, saying it was the key to providing a competitive service to cable, they are fighting just as hard not to have to carry all of them, arguing that too much of a good thing could hurt their business.

At issue is the must-carry provision in the Satellite Home Viewer Improvement Act (SHVIA), passed in November 1999, which says that, if a satellite operator carries one local station, it must carry, free of charge, any or all of the local stations that ask for carriage.

Under the provision, satellite operators could conceivably be compelled to carry more than 20 local stations in larger markets, limiting bandwidth availability for local stations in smaller adjacent markets and potentially more lucrative cable networks. The lawsuit charges that the must-carry provision violates the First Amendment because it favors certain local broadcasters over other stations and cable networks. The provision is set to go into effect Jan. 1, 2002.

The Satellite Broadcasting and Communications Association, DirecTV and EchoStar filed the suit in Federal District Court in the Eastern District of Virginia last Wednesday, naming the U.S. government, the Federal Communications Commission and the U.S. Copyright Office as defendants.

The Supreme Court upheld cable must-carry rules as constitutional in 1997, rejecting that industry's argument that the law was unconstitutional. But in filing the suit last week, the plaintiffs made it a point to distance themselves from cable operators, who, they say, have concentrated control in local markets and therefore wield "monopoly power" over local broadcasters.

"Because satellite providers do not possess concentrated local-market power," said SBCA, "a local broadcast station does not require carriage by a satellite provider to ensure its continued viability."

That argument notwithstanding, "we're confident that the must-carry law will be upheld by the courts," said National Association of Broadcasters spokesman Dennis Wharton.