Statement of Commissioner Kevin J. Martin and Commissioner Michael J. Copps

Re:	National Association of Broadcasters and Association of Local Television Stations 
Request for Modification or Clarification of Broadcast Carriage Rules for Satellite Carriers, 
Declaratory Ruling and Order, CSR-5865-Z (Media Bureau, April 4, 2002)


In 1999, Congress passed the Satellite Home Viewer Improvement Act (SHVIA).  
SHVIA allowed satellite carriers to carry local broadcast signals, but required that if a provider 
carries any local broadcast signals, it must carry all local broadcast signals.  Moreover, Congress 
required that satellite carriers provide subscribers with access to those local broadcast signals at a 
nondiscriminatory price and in a nondiscriminatory manner.

The Media Bureau recently determined that EchoStars two-dish plan failed to provide 
consumers with access to local broadcast signals at a nondiscriminatory price or in a 
nondiscriminatory manner, and failed to place these signals on contiguous channels.   We 
wholeheartedly agree with the Bureau Orders conclusion that the two-dish plan therefore 
violated the nondiscrimination provision of SHVIA and  76.66(i) of the Commissions rules. 

Unfortunately, and puzzlingly, the Bureau Order did not stop there.  The Bureau Order 
went on to propose several options regarding how EchoStar could remedy the statutory and 
rule violations.  For instance, as discussed below, the Bureau Order states EchoStar could 
continue its two-dish plan merely by providing [i]mmediate and direct communication to its 
subscribers regarding the second dish option.

We find it implausible that EchoStars two-dish policy would be permissible, and the 
above violations remedied, if EchoStar merely provides consumers with better notice of its 
discriminatory actions and the steps the consumer must take to alleviate the differential 
treatment.  Such a remedy does not ensure consumers have access to all local broadcast 
stations a nondiscriminatory manner, but rather makes some stations unavailable to consumers as 
a practical matter.  Indeed, unless individual consumers take the time to read or listen to the 
communication, actually request the second dish, and then take the time off work to wait for 
the dish to arrive and to have it installed, those consumers certainly will not have access to the 
broadcast channels EchoStar chooses to provide only through the second dish.  

We do not see how this remedy is consistent with the nondiscrimination requirement in 
338(d), the Commissions implementing rule, or even the Bureau Orders own findings that 
such steps impose a discriminatory cost on certain local broadcast channels.  Such a remedy 
effectively eviscerates the finding that EchoStars current policy is unlawful.  We fear that the 
Bureau Order will allow EchoStar to continue its two-dish policy  albeit with better notice  in 
a manner that continues to make some local broadcast signals inaccessible to consumers as a 
practical matter.


Carry One, Carry All Requirement

SHVIA amended the copyright laws to greatly facilitate satellite carriers ability to offer 
their subscribers access to the local broadcast signals.   In exchange, Congress required that 
satellite carriers that carry any local broadcast signals must carry all local broadcast signals.   
This carry one, carry all requirement was intended to prevent satellite carriers from choosing 
to carry only the most popular broadcast stations and effectively preventing many other local 
broadcasters from reaching potential viewers in their service areas.   Underlying the carry one, 
carry all obligation is SHVIAs nondiscrimination requirement, incorporated into  338(d) of 
the Communications Act of 1934, as amended.  Section 338(d) provides that: 

the satellite carrier shall retransmit the signal of the local television 
broadcast stations to subscribers in the stations local market on 
contiguous channels and provide access to such stations signals at 
a nondiscriminatory price and in a nondiscriminatory manner on 
any navigational device, on-screen program guide, or menu. 

In November of 2000, the Commission issued a Report and Order implementing the 
broadcast signal carriage provisions of SHVIA, including the above nondiscrimination 
provision.   Parties had asked the Commission to interpret this provision as prohibiting satellite 
carriers from requiring subscribers to obtain new equipment to access some, but not all of the 
local signals in a market.  The Commission found that: 

the language of Section 338(d) covers the additional equipment 
concerns raised by the parties and bars satellite carriers from 
requiring subscribers to purchase additional equipment [e.g., a 
satellite dish] when television stations from one market are 
segregated and carried on separate satellites. However, we are not 
prohibiting a satellite carrier from requiring a subscriber to pay for 
an additional dish in order to receive all television stations from a 
single market.  For example, DirecTV may require an additional 
dish to receive all television stations from the Baltimore market, 
but it may not require subscribers to purchase the same to receive 
some Baltimore stations where the others are available using 
existing equipment.  

The Commission therefore promulgated the following rule prohibiting a satellite carrier from 
requiring subscribers to obtain additional equipment at their own expense in order to access 
some, but not all, local television broadcast stations:

Within a market, no satellite carrier shall provide local-into-local 
service in a manner that requires subscribers to obtain additional 
equipment at their own expense or for an additional carrier charge 
in order to obtain one or more local television broadcast signals if 
such equipment is not required for the receipt of other local 
television broadcast signals.   

DIRECTV petitioned the Commission to reconsider its interpretation of the 
nondiscrimination provision.  DIRECTV sought a broader finding that satellite carriers could 
provide local broadcast signals from two different satellite dishes without violating  338(d).  
Specifically, DIRECTV contended that  338(d) does not prohibit satellite carriers from 
offering local-into-local services from multiple locations, with multiple dishes if necessary, 
where it makes business and technical sense to do so.   

The Commission rejected this argument in the Order on Reconsideration released last 
September.   Indeed, the Commission determined that:

a limited prohibition on requiring subscribers to obtain a separate 
dish to receive some local signals when other local signals are 
available without a separate dish is necessary to give full effect to 
local station carriage requirements.   

The Commission continued to explain that:
 
Otherwise  satellite carriers could structure local station 
packages and separate dish requirements to discourage consumers 
from subscribing to certain local stations, including local 
noncommercial stations. 

Indeed, the Bureau Order yesterday expressly re-affirmed these conclusions. 



EchoStars Two-Dish Policy and the Bureau Order

When the carry one, carry all obligation became effective this past January, EchoStar 
implemented a two-dish plan.  It placed some local broadcast signals on a second dish, but did 
not charge subscribers an additional fee for obtaining that second dish.  

The Bureau Order yesterday determined that, as implemented, EchoStars policy violated 
both the Communications Act and the Commissions rules.   The Bureau Order found that 
EchoStar committed three separate violations.  First, EchoStar was providing access to certain 
stations at a discriminatory price.   Second, EchoStar was not retransmit[ing] the signal of 
local television broadcast stations to subscribers on contiguous channels.   Third, EchoStar was 
not providing access to local television broadcast station signals in a nondiscriminatory manner 
on its on-screen program guide or menu. 

With respect to the finding of price discrimination, the Bureau Order found that EchoStar 
effectively required subscribers to obtain the second dish at their own expense, even if that 
expense was not in the form of a price tag on the equipment.  As the Bureau Order explained:

From the subscribers point of view, the costs of obtaining the 
free dish under EchoStars implementation of its two-dish plan 
include the time, trouble, and inconvenience to the subscriber to 
obtain the information concerning the need for the second dish, the 
procedures for arranging to get the second dish (including 
overcoming any misinformation), plus the time spent waiting for 
the second dish to be installed. As such, EchoStars two-dish 
plan results in discrimination based on price of the type Congress 
and the Commission intended to prohibit.

In effect, the Bureau Order found that, as implemented, EchoStars two-dish policy 
placed a burden on the consumer to arrange to get the second dish and to wait to have the dish 
installed.  This burden constituted an increased cost to the consumer to access certain local 
stations in violation of SHVIAs nondiscriminatory price requirement.  We agree with this 
conclusion.

Similarly, the Bureau Order concluded that EchoStars manner of carriage for certain 
local stations is discriminatory in terms of access to such stations on the on-screen program 
guide and menu.   The Bureau Order found that:

EchoStars on-screen electronic program guide unlawfully 
discriminates against disfavored local signals because those 
stations do not appear on the program guide unless and until a 
second dish is obtained and installed.  Thus, subscribers 
attempting to tune to all the local stations that they have paid for as 
part of a package will be unable to find certain local stations in 
some markets.   

Thus, the Bureau Order also found that EchoStar was unlawfully discriminating against 
disfavored local signals because subscribers could not access all of the local signals until a 
second dish was obtained and installed, again violating  338(d).  We agree with this conclusion, 
as well.


The Bureau Orders Remedy Options

	Having found that EchoStars two-dish plan as implemented violated both Congressional 
statute and Commission rules, the Bureau Order proceeded to establish remedy options that 
EchoStar could take in order to prevent the unlawful discrimination that has taken place.   
Several options  each of which is independent of the other  would result in consumers 
continuing to be unable to access all of their local signals, in violation of SHVIA, Commission 
rules, Commission language contained in the Report and Order and the Order on 
Reconsideration, and even the findings as to what constitutes discrimination that the Bureau 
Order made earlier in very same document.  

For example, the Bureau Order concludes that one approach that EchoStar could take 
to come into compliance with SHVIA and Commission rules and address the unlawful 
discriminatory actions would be to undertake: 

[i]mmediate and direct communication with all affected local-into-
local subscribers that they are not receiving all the local stations 
for which they are paying unless EchoStar has installed the 
necessary additional equipment, and that EchoStar will provide the 
necessary equipment free of any charge. 

We do not see how better notice of EchoStars 2-dish plan remedies the findings of 
unlawfulnessprice discrimination, non-contiguous channel placement, and lack of access to 
signals in a nondiscriminatory manner.   

With respect to price discrimination, the Bureau Order found that the costs of obtaining 
the free dish had included three aspects: (1) obtaining the information that a second dish was 
needed, (2) arranging to receive the second dish, and (3) waiting for the second dish to be 
installed.  Notice might mitigate the first factor, if subscribers bother to read or listen to the 
communication EchoStar transmits to them.  Yet it does nothing to rectify the remaining steps, 
which most subscribers might consider the more costly aspects since they likely require taking 
time off from work to wait for the dish to arrive and be installed.  Even more fundamentally, we 
were not aware that effective notice of price discrimination would be considered an effective 
remedy for that same discrimination which was just found to have violated a statute.  And we see 
no caveat in the statute that indicates that satellite carriers must provide access to broadcast 
stations signals at a nondiscriminatory price  unless customers know the prices are 
discriminatory.  Indeed, if that were the case, EchoStar could charge additional fees on a per-
channel basis so long as adequate notice was provided.  We do not believe that mere notice of 
any price discrimination is what Congress intended by a requirement that satellite carriers carry 
one, carry all local broadcast signals at a nondiscriminatory price.

Similarly, with respect to the findings that EchoStars 2-dish plan as implemented also 
violated the statutes contiguous channel placement and nondiscriminatory access through the 
EPG requirements, we fail to see how notice addresses these violations either. 

Finally, we question whether the Bureau had the authority to make such decisions as to 
permissible remedies.  The Bureau cannot propose compliance measures that leave in place 
conduct that violates express statutory requirements, violates Commission rules, and is 
inconsistent with Commission language in the Order on Reconsideration.  

As specified in our rules, the Bureau has only that authority delegated to it.  Section 
0.283 expressly prohibits the Bureau from deciding matters that present novel questions of law, 
fact or policy that cannot be resolved under existing precedents and guidelines.   It is clear to 
us that several of the Bureaus remedy options are inconsistent with existing precedent and 
guidelines.  The Commission stated in the Order on Reconsideration that a limited prohibition 
on requiring subscribers to obtain a separate dish to receive some local signals when other local 
signals are available without a separate dish is necessary to give full effect to local station 
carriage requirements.   As the Bureaus proposed remedy appears to violate the statute and 
expressly contradicts Commission language, it can not be implemented on delegated authority by 
the Bureau.  

Indeed, the language in the Commissions order implies that EchoStars policy of 
requiring subscribers to obtain a second dish to obtain some local signals may never be 
consistent with SHVIA.   We do not prejudge here, however, whether the Commission could 
permit a two dish plan in the context of the carry one, carry all requirements that would be 
implemented in a non-discriminatory fashion consistent with the statute and the Commissions 
rules.  That issue is ambiguous. But even if ambiguous, it would be a novel issue, and thus the 
Bureau could not resolve it on delegated authority.  

There is nothing in the Commissions Order, the Order on Reconsideration, or the 
implementing regulations that says satellite carriers may require subscribers to obtain a second 
dish to obtain some, but not all, local broadcast signals without violating  338(d).  Certainly the 
Commission has never discussed exactly how such a policy could be non-discriminatory.  The 
Bureau Orders discussion of the specific circumstances under which such a 2-dish policy would 
be permissible, therefore, is without precedent and thus beyond the scope of the Bureaus 
authority.  And the Commission has issued no precedent or guidelines regarding how notice of 
discriminatory conductno matter how prominentcould condone that conduct. Again, that is a 
novel question of law.

	Finally, the Bureau Order includes a discussion of EchoStars ability to seek a waiver.   
This paragraph is, at best, confusing.  First, the Bureau Order states that EchoStar may seek a 
short-term waiver rather than terminate service in a market it is currently serving with local-into-
local service.   A waiver of what?  Of the nondiscriminatory pricing requirement?  No, 
because, as the Bureau Order notes, it cannot consider or grant a waiver insofar as EchoStars 
actions directly violate the statute.  Of the nondiscriminatory program guide treatment 
requirement?  No, because, again, that is in the statute. Of the preceding remedy options? No, 
because the Bureau Order notes that EchoStar could remedy its violations by choosing some or 
all of these approaches.   That leaves only our one rule on point:  76.66 (i)(4).  Yet how could 
we waive this prohibition on requir[ing] subscribers to obtain additional equipment at their own 
expense  in order to obtain one or more local television broadcast signals without also 
waiving the statutory obligation to provide access to such stations signals at a 
nondiscriminatory price?  


Conclusion

In passing SHVIA, Congress ensured that a satellite carrier choosing to offer any local 
broadcaster would be required to carry all local stations in a nondiscriminatory fashion.  The 
Bureau Order found that EchoStars actions discriminated against some signals, in violation of 
the statutory nondiscrimination requirement.  Yet the Bureau Order also found that more 
effective notice of this discrimination would be sufficient to remedy EchoStars actions and 
bring its two-dish plan into compliance.  We believe the nondiscrimination requirements of the 
statute, Congressional intent, and Commission rules all demand more.  But perhaps even more 
importantly, DBS consumers deserve more.

  	National Association of Broadcasters and Association of Local Television Stations Request for 
Modification or Clarification of Broadcast Carriage Rules for Satellite Carriers, Declaratory Ruling and Order, 
CSR-5865-Z (Media Bureau, April 4, 2002) (Bureau Order) at  2.
  	See id.  See also 47 U.S.C.  338(d); 47 C.F.R.  76.66(i).  
  	See 17 U.S.C.  122(a).
  	See 47 U.S.C.  338(a).
  	Joint Explanatory Statement of the Committee of Conference on H.R. 1554, 106th Cong., H.R. Conf. Rep. 
No. 106-464, at 101 (1999).
  	47 U.S.C. 338(d).
  	See Implementation of the Satellite Home Viewer Improvement Act of 1999: Broadcast Signal Carriage 
Issues, Report and Order, 16 FCC Rcd 1918 (2000) (Report and Order).
  	Id. at 16 FCC Rcd 1961 (emphasis added).
  	See 47 C.F.R.  76.66 (i)(4).
  	See DIRECTV Petition for Reconsideration at 19-23 (filed Feb. 22, 2001).  DIRECTVs Petition requested 
reconsideration of other aspects of our original Report and Order, as well; those arguments are not relevant here.
  	[Id. at 23.]
  	See Implementation of the Satellite Home Viewer Improvement Act of 1999: Broadcast Signal Carriage 
Issues, Order on Reconsideration, 16 FCC Rcd 16544, 16565-16566 (2001) (Order on Reconsideration).
  	Id. at 16566.
  	Id.
  	See Bureau Order at  5 (quoting the Order on Reconsideration, 16 FCC Rcd at 16566).
  	Id. at  2 (citing 47 U.S.C.  338(d) and 47 C.F.R.  76.66(i)).
  	Id.
  	Id.
  	Id.
  	Id. at  27.
  	Id. at  28.
  	Id. at  32-33.
  	Id. at  32.
  	See id. at  2.
  	47 C.F.R. 0.283(c).
  	Order on Reconsideration, 16 FCC Rcd at 16566.
  	See Bureau Order at  34.
  	Id.
  	Id.
  	Id. at  31.
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