Opinion ID: 77316
Heading Depth: 3
Heading Rank: 1

Heading: EchoStar's History of Compliance Procedures

Text: 14 From March 1996 to July 1998, EchoStar offered distant network programming through an agreement with another satellite provider, PrimeTime 24 Joint Venture. PrimeTime 24 utilized a subjective method of determining subscriber eligibility based simply on a potential subscriber's qualitative evaluation of her television signal. In 1998, the United States District Court for the Southern District of Florida issued first a preliminary, then a permanent injunction requiring PrimeTime 24 to terminate the delivery of distant network signals to subscribers who had been signed up using this subjective method. Days after the entry of the injunction, EchoStar terminated its agreement with PrimeTime 24 and canceled its subscribers' PrimeTime 24 distant network programming packages. EchoStar then switched virtually all subscribers to new, EchoStar-designed distant network programming packages. 15 After EchoStar terminated its relationship with PrimeTime 24, it began evaluating new-subscriber eligibility through a system referred to as the red-light/green-light method. Under this system, each zip code was designated as either a red-light or a green-light zip code based on predicted signal strength. A household in a red-light area was presumptively ineligible for service. EchoStar claims that it refused to sign up subscribers who lived in red-light zip codes unless the subscribers obtained a valid waiver from the network station. The district court found, however, that EchoStar presented no real evidence that its determination of whether zip codes were red-light or green-light areas was reasonably calculated to prevent signups of ineligible subscribers. Additionally, the court found that EchoStar's customer service representatives were able to override the red-light/green-light designations— that is, even if a subscriber was in a red-light zip code, a customer service representative still had discretion to sign up that subscriber for distant network programming. 16 EchoStar began using the ILLR model to determine subscriber eligibility in 1999. Echostar's ILLR methodology involved the following three relevant factors: First, until October 2000, EchoStar utilized a DMA Rule by which it only used the ILLR model to consider the signal strength of network stations in a given household's Nielsen-defined designated market area (DMA). In other words, even if a household received a Grade B or higher signal from network stations outside a household's DMA, EchoStar would consider it potentially unserved. Additionally, EchoStar included interference in its ILLR analyses until January 2002. 13 Finally, EchoStar utilized (and continues to use) two vendors—Decisionmark and Dataworld —for its ILLR analysis. So long as one vendor indicates that a household cannot receive a Grade B signal, EchoStar considers the household to be unserved. 14 17 The district court found that recently, EchoStar has taken significant measures to ensure compliance with the Act. Customer service representatives are trained and are no longer able to override system determinations of subscriber ineligibility. Additionally, EchoStar uses a backup compliance system and, on a monthly basis, reanalyzes all new subscribers to ensure eligibility. EchoStar terminates distant network programming to any subscribers found to be ineligible.