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

Heading: EchoStar's ILLR Methodology

Text: 34 EchoStar claims that the district court erred in its interpretation of the Act and its application to three components of EchoStar's ILLR methodology. Although we reject Echostar's first two arguments, we agree that the Act does not proscribe the use of multiple vendors. Because this determination has no bearing on EchoStar's failure to carry its statutory burden of proof, it does not impact the ultimate disposition of this case. 35
36 EchoStar claims that, contrary to the district court's determination, the Act endorses the DMA Rule. 26 Thus, EchoStar contends that so long as the network station in a household's Nielsen-defined DMA does not provide a Grade B or better signal, the household is properly considered unserved. The district court concluded, however, that if a household receives any signal of Grade B or better, regardless of its source, the household is served with respect to that network. We agree with the district court's interpretation of the Act. 37 The Act defines unserved household with respect to a given network as one that cannot receive ... an over-the-air signal of a primary network station affiliated with that network of Grade B intensity. 17 U.S.C. § 119(d)(10)(A) (emphasis added). The definition is not limited to the primary network station in the household's DMA. It refers to the signal of any network station. The plain meaning of the statute is not altered by EchoStar's oblique reference to 17 U.S.C. § 122(j)(2)'s definition of local market, which is somehow supposed to shed light on the meaning of local service area as used in 17 U.S.C. § 501(e). Not only is this end-around unconvincing, it is unnecessary given the clear language of the statute. Thus, we agree with the district court that EchoStar's use of the DMA Rule was in violation of the Act. 38
39 EchoStar also objects to the district court's conclusion that the use of interference in the ILLR model was improper after May 2000. We agree with the district court's resolution of this issue. As the court noted, in May 2000, the FCC issued a First Report and Order that made modifications to the ILLR model and provided a step-by-step cookbook describing how the model was supposed to be run. A prior cookbook had included interference, but the May 2000 and July 2002 cookbooks specifically and clearly omitted it. After the SHVIA amendment, the Act permits use of the ILLR model set forth by the [FCC] ..., as that model may be amended by the Commission ... to increase the accuracy of that model. 17 U.S.C. § 119(a)(2)(B)(ii)(I). 27 Accordingly, the use of any ILLR method that does not comply with the specific procedures the FCC establishes for the model cannot be said to conform to the Act's requirements. Therefore, because EchoStar's model included interference and thereby did not conform to the FCC's specifications, it did not comply with the Act and the district court could have determined that the non-compliant model provided no presumptive evidence of eligibility. 40
41 EchoStar claims that it was error to hold that the Act prohibits the use of multiple ILLR vendors in assessing subscriber eligibility. The district court concluded that EchoStar could have chosen either of these two competent vendors to check the ILLR status of its subscribers, CBS Broad., Inc., 276 F.Supp.2d at 1250, but because EchoStar used both vendors to exploit inconsistencies between the two, it acted unlawfully. We find nothing in the Act to support this conclusion. The statute provides that [i]n determining presumptively whether a person resides in an unserved household . . ., a court shall rely on the [ILLR] model set forth by the [FCC]. 17 U.S.C. § 119(a)(2)(B)(ii)(I). So long as a satellite carrier uses vendors whose models comply with the FCC's ILLR guidelines, the carrier may utilize as many different vendors as it would like. We note, however, that the ILLR model is only a presumptive determination of eligibility, and the satellite carrier bears the ultimate burden of proving that a household is unserved. Unless there is evidence that one model is more accurate than another—which, in this case, EchoStar's witnesses did not suggest—when the models produce conflicting results, it would be difficult to conclude that a satellite carrier has satisfied its burden of proof. In such circumstances it would likely be necessary to obtain an accurate measurement pursuant to section 119(a)(2)(B)(ii)(II) to demonstrate subscriber eligibility. 28 Thus, while EchoStar's use of two ILLR vendors may negatively affect its ability to satisfy its burden, it is not necessarily unlawful to do so. 42