On October 20, the 11th Circuit, United States Court of Appeals issued a permanent injunction against EchoStar Communications for illegally retransmitting local broadcast network signals. Breaking this law (Title 17 of the US Code) requires the “death penalty”—that the violator can no longer send a signal to anyone receiving a “distant network signal” (people outside of a certain broadcast radius of a market). This permanent injunction takes effect December 1, 2006.
This means that on December 1, Echostar (DISH Network) will have to cut off distant network programming to 850,000 customers. And those customers aren’t going to like it.
So in recent days, Echostar has begun a campaign to get members of Congress to insert language into last-minute, lame-duck session legislation that would allow them to continue to illegally send distant network signals, continue to profit from their illegal behavior, and nullify a court injunction.
Under existing law, satellite companies are allowed to provide local channels to customers who reside within the market area of a local broadcaster but who for reasons of distance or geography are unable to adequately receive those signals. But courts have found that Echostar was illegally allowing virtually anyone who asked to receive local signals through their DISH Network subscription.
The law is clear—rights exist in a local broadcast stream and are owned by the local broadcaster. Also clear—when the property rights of local broadcasters are run roughshod over, the penalties are severe. Echostar defied a clear law, was found guilty, and now wants to have Congress release them from the penalty of their bad behavior, essentially crippling the rule of law to benefit a bad actor.
So what’s at stake? The rule of law, particularly the importance of injunctions.
If injunctions are to have any meaning as a tool for the judiciary then they must also be respected by the legislature, particularly when one has already been imposed.
If injunctions for violations of property rights are to be ignored as a means of enforcing the laws, then the law has no real force, and the property right has no real meaning. There are obvious implications here for the patent reform debate as well.
One final point: Echostar’s customers who may lose their access to local broadcast signals (including some employees of IPI) may very well be angry on December 1st. But their anger and action should be directed at Echostar, not at Congress—at least in this affair.