NAB savors 'must' win

Broadcasters won a victory in a Virginia federal district court when that court ruled that it is constitutional to require satellite-TV providers to carry every local TV station in every market they choose to serve.

"We're pleased the court has vindicated the constitutionality of local-television-station-carriage provisions of the Satellite Home Viewer Improvement Act," said NAB President Eddie Fritts.

But the decision was as much a win for broadcast attorneys, who were instrumental in inserting a critical provision in that law, passed in 1999, that gave satellite-TV companies a key decision: Avail yourself of the copyright license that gives you the right to carry local TV signals, and you've got to carry every station in that market. In other words, if you take one sister to the ball, you have to take them all.

Broadcasters are so confident in the strength of that provision that they say it makes or breaks the law. "We believe the law is written so that, if must-carry were struck down, the copyright license would be struck down, too," says Jim Hedlund, president of the Association of Local Television Stations. Losing the license would be a huge blow to satellite-TV companies, which pushed hard to get the right to add local TV stations to their video packages.

When broadcasters and satellite-TV companies were fighting over the law, it was clear to many that the provision would likely be the reason a satellite-TV-industry challenge to must-carry wouldn't hold up in court. For that reason, satellite-TV companies tried to get it out of the final bill, even though they agreed in principle to the "carry one, carry all" regime when they signed on to it. The satellite companies failed to get rid of the provision, and the court appears to be bearing out the hopes of broadcast attorneys.

A second test of whether this so-called "tying" provision (as in tying carriage requirements to copyright rights) will again prove powerful for broadcasters comes this September, when the Fourth Circuit Court of Appeals in Richmond, Va., hears oral arguments on what is likely to be a merged suit. That suit would combine an appeal of the Virginia Federal District Court decision with an earlier satellite-industry suit against the FCC's rules implementing the law. The Satellite Broadcasting & Communications Association is asking that the two be combined.

Satellite attorneys chose to file one of their lawsuits in the Fourth Circuit because its decisions have tended to give primacy to First Amendment concerns rather than public- interest or other government arguments. "We remain firmly confident that we will ultimately win this case on the merits of our constitutional arguments," says SBCA President Chuck Hewitt.