275 F.3d 337 (4th Cir. 2001), 01-1151, Satellite Broad. & Commun. Assoc. v. Fed. Commun. Comm'n

Docket Nº:01-1151, 01-1272, 01-1818, 01-1271
Citation:275 F.3d 337
Party Name:SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, ASSOCIATION OF AMERICA'S PUBLIC TELEVISION STATIONS; PUBLIC BROADCASTING SERVICE; CORPORATION FOR PUBLIC BROADCASTING; NATIONAL ASSOCIATION OF BROADCASTERS; CONSUMER FEDERATION OF AMERICA; OFFICE OF COMMUNI
Case Date:December 07, 2001
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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275 F.3d 337 (4th Cir. 2001)

SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION, Petitioner,

v.

FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents,

ASSOCIATION OF AMERICA'S PUBLIC TELEVISION STATIONS; PUBLIC BROADCASTING SERVICE; CORPORATION FOR PUBLIC BROADCASTING; NATIONAL ASSOCIATION OF BROADCASTERS; CONSUMER FEDERATION OF AMERICA; OFFICE OF COMMUNICATION, UNITED CHURCH OF CHRIST, INCORPORATED, Intervenors.

ECHOSTAR SATELLITE CORPORATION, Petitioner,

v.

FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents,

ASSOCIATION OF AMERICA'S PUBLIC TELEVISION STATIONS; PUBLIC BROADCASTING SERVICE; CORPORATION FOR PUBLIC BROADCASTING; NATIONAL ASSOCIATION OF BROADCASTERS; CONSUMER FEDERATION OF AMERICA; OFFICE OF COMMUNICATION, UNITED CHURCH OF CHRIST, INCORPORATED, Intervenors.

NATIONAL ASSOCIATION OF BROADCASTERS, Petitioner,

PAXSON COMMUNICATIONS CORPORATION, Intervenor,

v.

FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents,

Page 338

ASSOCIATION OF AMERICA'S PUBLIC TELEVISION STATIONS; PUBLIC BROADCASTING SERVICE; CORPORATION FOR PUBLIC BROADCASTING; CONSUMER FEDERATION OF AMERICA; OFFICE OF COMMUNICATION, UNITED CHURCH OF CHRIST, INCORPORATED, Intervenors.

SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION; ECHOSTAR COMMUNICATIONS CORPORATION; DISH, LIMITED, d/b/a DISH Network; DIRECTV ENTERPRISES, INCORPORATED; DIRECTV OPERATIONS, INCORPORATED; DIRECTV, INCORPORATED, Plaintiffs Appellants,

and

NATIONAL ASSOCIATION OF BROADCASTERS; THE ASSOCIATION OF LOCAL TELEVISION STATIONS, INCORPORATED; THE UNIVISION NETWORK LIMITED PARTNERSHIP AND UNIVISION TELEVISION STATIONS, INCORPORATED, Intervenors/Plaintiffs,

v.

FEDERAL COMMUNICATIONS COMMISSION; WILLIAM E. KENNARD, Chairman; SUSAN NESS, Commissioner, in her official capacity; HAROLD FURCHTGOTTROTH; MICHAEL K. POWELL, Commissioner, in his official capacity; GLORIA TRISTANI, Commissioner, in her official capacity; UNITED STATES COPYRIGHT OFFICE; LIBRARY OF CONGRESS; JAMES H. BILLINGTON, Librarian of Congress; MARY PETERS, Register of Copyrights, in her official capacity; UNITED STATES OF AMERICA, Defendants Appellees,

ASSOCIATION OF AMERICA'S PUBLIC TELEVISION STATIONS; PUBLIC BROADCASTING SERVICE; CORPORATION FOR PUBLIC BROADCASTING, Intervenors Appellees,

PEGASUS COMMUNICATIONS CORPORATION; CHANNEL MASTER LLC, Parties in Interest.

NATIONAL CABLE SATELLITE CORPORATION (C-SPAN); SPACE SYSTEMS/LORAL, INCORPORATED; PAXSON COMMUNICATIONS CORPORATION; CONSUMER FEDERATION OF AMERICA; OFFICE OF COMMUNICATION, UNITED CHURCH OF CHRIST, INCORPORATED; NATIONAL ALLIANCE FOR MEDIA ARTS & CULTURE; ASSOCIATION OF INDEPENDENT VIDEO AND FILMMAKERS; VIRGINIA CITIZENS CONSUMER COUNCIL; CONEXANT SYSTEMS, INCORPORATED; BROADCOM CORPORATION, Movants.

Nos. 01-1151, 01-1272, 01-1818, 01-1271

United States Court of Appeals, Fourth Circuit

December 7, 2001

Argued: September 25, 2001

Corrected January 31, 2002

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (CA-00-1571-A)

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ARGUED: Charles Justin Cooper, COOPER, CARVIN & ROSENTHAL, P.L.L.C., Washington, D.C., for Satellite, et al. Donald Beaton Verilli, Jr., Nory Miller, JENNER & BLOCK, L.L.C., Washington, D.C., for NAB. Mark Bernard Stern, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Louis Emmanuel Peraertz, Special Counsel, FEDERAL COMMUNICATIONS COMMISSION, Washington, D.C., for Federal Appellees. ON BRIEF: Michael W. Kirk, Victor J. Wolski, COOPER, CARVIN & ROSENTHAL, P.L.L.C., Washington, D.C.; Brian Koukoutchos, Mandeville, Louisiana; Charles G. Cole, Pantelis Michalopoulos, Rhonda M. Rivens Bolton, STEPTOE & JOHNSON L.L.P., Washington, D.C., for Satellite, et al. Henry L. Baumann, Benjamin F.P. Ivins, NATIONAL ASSOCIATION OF BROADCASTERS, Washington, D.C.; Thomas P. Olson, WILMER, CUTLER & PICKERING, Washington, D.C., for NAB, et al. Stuart E. Schiffer, Acting Assistant Attorney General, Jacob M. Lewis, Appellate Staff, Joseph W. Lobue, Hannah Stires, Federal Programs Branch, Civil Division, UNITED

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STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Jane A. Mago, General Counsel, Daniel M. Armstrong, Associate General Counsel, FEDERAL COMMUNICATIONS COMMISSION, Washington, D.C., for Federal Appellees. Robert A. Long, Jr., Mark H. Lynch, David L. Franklin, COVINGTON & BURLING, Washington, D.C.; Marilyn Mohrman-Gillis, Vice-President, Policy and Legal Affairs, Lonna Thompson, Director of Legal Affairs, Andrew D. Cotlar, Staff Attorney, ASSOCIATION OF AMERICA'S PUBLIC TELEVISION STATIONS, Washington, D.C.; Kathleen Cox, Senior Vice President Policy, General Counsel and Corporate Secretary, Robert M. Winteringham, Senior Staff Attorney, CORPORATION FOR PUBLIC BROADCASTING, Washington, D.C.; Gregory Ferenbach, Senior Vice President and General Counsel, Paul Grego, Vice President and Deputy General Counsel, PUBLIC BROADCASTING SERVICE, Alexandria, Virginia, for Intervenors Public Television Stations, et al. Harold Feld, Andrew Jay Schwartzman, Cheryl A. Leanza, MEDIA ACCESS PROJECT, Washington, D.C., for Intervenors Consumer Federation, et al. Craig C. Reilly, RICHARDS, MCGETTIGAN, REILLY & WEST, P.C., Alexandria, Virginia, for Intervenor Paxson.

Before WIDENER, NIEMEYER, and MICHAEL, Circuit Judges.

MICHAEL, Circuit Judge:

Direct broadcast satellite (DBS) service has recently joined cable and broadcast television as a major force in the market for delivering television programming to consumers. In these consolidated cases, representatives of the satellite industry raise various constitutional challenges to Congress's efforts to regulate competition in that market through the Satellite Home Viewer Improvement Act of 1999 (SHVIA). Pub. L. No. 106-113, 113 Stat. 1501A-523. In addition, petitioners from the broadcast industry argue that one provision (the "a la carte rule") of the FCC's order implementing SHVIA must be struck down as an unreasonable interpretation of the statute.1 By enacting SHVIA, Congress sought to promote competition between the satellite and cable industries by creating a statutory copyright license that allows satellite carriers to carry the signals of local broadcast television stations without obtaining authorization from the holders of copyrights in the individual programs aired by those stations. The Act also imposes a "carry one, carry all" rule, which was designed to "preserve free television for those not served by satellite or cable and to promote widespread dissemination of information from a multiplicity of sources." H.R. Conf. Rep. No. 106-464, at 101 (1999) (SHVIA Conference Report). The rule, which is scheduled to take effect on January 1, 2002, will require satellite carriers that choose to take advantage of the statutory copyright license by carrying one broadcast station in a local market to carry all requesting stations within that market. We hold, as did the district court, that the carry one, carry all rule does not violate either the First Amendment or the other constitutional provisions cited by the satellite carriers. We also hold that the FCC's a la carte rule, which allows satellite carriers

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to offer local broadcast stations to their subscribers either individually or as part of a single package, is not arbitrary, capricious, or contrary to law. See 5 U.S.C. S 706(2)(A).

I.

A.

Nearly all consumers receive their television programming through one of three delivery systems: broadcast television, cable, or satellite. Broadcast television stations transmit electromagnetic signals over the air, and these signals can be captured by any receiving television antenna within range. Twenty percent of American television households rely exclusively on broadcast stations for their television programming. Viewers pay no fee to receive broadcast signals. Instead, broadcast stations are supported by advertisers who pay for air time at rates determined by the audience sizes for particular programs. The most popular broadcast stations are affiliated with one of the four major television networks (ABC, CBS, NBC, and Fox). The major network affiliates compete for viewers and advertisers with various independent broadcasters, including independent commercial stations, noncommercial stations, and affiliates of emerging networks (UPN, WB, and PAX).2

The broadcasters' principal competitors in the television programming delivery market are the cable and satellite industries. Cable and satellite companies now serve around 80 percent of America's television households. Unlike broadcasters, their primary source of revenue is subscription fees. Cable television distributes its signals to subscribers over a local network of wires. It has for many years been the leading provider of television programming to American homes. Roughly 67 percent of television households currently subscribe to cable. Although cable subscribers must pay for the right to receive cable signals, they receive better picture quality and a wider variety of programming options than do television viewers who rely on antennas. Today, 84 percent of cable systems offer their subscribers at least 30 channels, including national non-broadcast channels (such as ESPN, MTV, CNN, and The Weather Channel) and regional non-broadcast channels (such as the New England Sports Channel). Cable operators also retransmit the signals of local broadcast stations to their subscribers.

Providers of DBS (direct broadcast satellite) service deliver television programming by uplinking signals to satellites orbiting in space and then beaming those signals to receiving dishes connected to...

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