Opinion ID: 77316
Heading Depth: 3
Heading Rank: 2

Heading: EchoStar Engage in a Pattern or Practice

Text: 59 Based on these guidelines, we now must determine if EchoStar ever engaged in a pattern or practice of statutory violations. Because the district court found EchoStar's current practices to be substantially compliant, it did not believe it necessary to determine if EchoStar's prior conduct constituted a pattern or practice of violations. See CBS Broad., Inc., 276 F.Supp.2d at 1254. Ordinarily we would remand to the district court to make this determination in the first instance. We believe, however, that there is no other possible conclusion that can be drawn from the district court's findings of fact. 60 We first note the length of time over which the district court found EchoStar to be using inadequate procedures for assessing subscriber eligibility. When EchoStar first began offering its own distant network packages in July 1998, it utilized the red-light/green-light method—a method for which the district court found no evidence [that would indicate that it] was reasonably calculated to prevent signups of ineligible subscribers. Id. at 1241. Even after EchoStar switched to the ILLR model, it utilized the illegitimate DMA Rule through October 2000, and unlawfully considered interference from at least August 2000 through January 2002. In other words, at no point from when EchoStar began offering distant network programming through January 2002 did it use a compliance method capable of reliably assessing subscriber eligibility. 31 61 This three-and-half year period of unlawful eligibility screening predictably led to a sizeable number of subscribers for whom EchoStar was unable to establish eligibility. We start with the ILLR analysis of EchoStar's April 2002 subscriber list. The best case scenario, which takes as valid EchoStar's claims of waivers and grandfathered status (the same ones regarding which the district court found EchoStar failed to carry its burden of establishing), indicates that, on a nationwide basis, EchoStar is presumptively providing illegal service to 26.5% of its subscribers receiving ABC distant network programming, 26.9% for CBS, 20.2% for Fox, and 28.1% for NBC. Thus, even for the network with the lowest percentage of violations, factoring in claims of eligibility that the district court found not to have been established, EchoStar exceeds the 20% threshold on a nationwide basis. While we believe this may very well be sufficiently objectionable, we glean some additional inculpatory conclusions from the district court's opinion: The Court finds that EchoStar has failed to meet its burden of proving that its subscribers are `unserved households.' Id. at 1248; EchoStar has failed to present any evidence ... that any of its subscribers are unserved as defined under SHVA. Id. at 1253; [T]he Court's [findings] support the conclusion that hundreds of thousands of EchoStar's distant network programming subscribers are not unserved households. Id. at 1249; Plaintiff's evidence indicates that a significant percentage of EchoStar's distant network programming subscribers receive a signal of Grade B intensity or better. Id. at 1253; Echostar has not met its burden in showing that any of its distant signal subscribers meet the grandfathering requirements. Id. at 1250; EchoStar has also failed to prove that any of its subscribers are eligible because they have obtained waivers from the relevant network stations. Id. at 1252. If these findings do not describe a pattern or practice of violations, we do not know what does. Cf. ABC, Inc. v. PrimeTime 24 Joint Venture, 184 F.3d 348, 354 (4th Cir.1999) (Since PrimeTime could prove that virtually none of its thousands of subscribers in the Raleigh-Durham market was eligible for satellite service, the district court held—and we agree—that the carrier had engaged in a `pattern or practice' of infringement.). 62 As if the magnitude of its ineligible subscriber base were insufficiently disconcerting, we have found no indication that EchoStar was ever interested in complying with the Act. Indeed, based on the district court's findings, we seem to have discerned a pattern and practice of violating the Act in every way imaginable. Whether it be overriding compliance determinations of ineligibility (more than 12,500 red zone subscribers per month), CBS Broad., Inc., 276 F.Supp.2d at 1242; making pledges under oath to terminate ineligible subscribers and then failing to present any evidence that this corrective action was taken, id. at 1244-45; blatantly disregarding FCC alterations to the ILLR model after it was specifically put on notice of such changes, id. at 1250; or failing to disconnect subscribers it initially recognized to be ineligible for grandfather status based on an atextual reinterpretation of the statutory provision, id. at 1251; EchoStar has disregarded the limitations of its statutory license and sought to avoid its obligations under the Act at every turn. Accordingly, we have no trouble concluding that EchoStar has engaged in a nationwide pattern or practice of delivering a primary transmission made by a network station ... to subscribers who are not eligible to receive the transmission under this section. 17 U.S.C. § 119(a)(7)(B).