Judge: Ergen Broke SHVA Promise

A federal judge had some tough words for senior officers of EchoStar Communications Corp. in a ruling that could bring more local broadcasters to satellite viewers who now get national network feeds.

Judge William P. Dimitrouleas of the U.S. Court for the Southern Florida District condemned the DBS operator's use of several tactics to illegally sign up viewers to the so-called distant signals of ABC, NBC, CBS and Fox when the viewers may have been able to receive those networks through local affiliates. To protect local broadcasters, the Satellite Home Viewer Act (SHVA) prohibits sending distant signals to viewers who can normally receive the local signals over the air.

The court found that EchoStar had also failed to show that it had removed the improper customers and failed to properly use Individual Location Longley-Rice analysis to determine which subscribers could receive local signals and hence would be banned from the distant signals.

Dimitrouleas also said that EchoStar Chairman Charles Ergen broke a pledge made to the court under penalty of perjury to remove certain ineligible subscribers from the distant service.

"It appears that EchoStar executives, including Mr. Ergen ... when confronted with the prospect of cutting off network programming to hundreds of thousands of subscribers, elected instead to break Mr. Ergen's promise to the court," the judge wrote.

Ergen apparently was hoping for a change in SHVA-which did occur-grandfathering the formerly illegal viewers. But the judge said that when Ergen made his promise to the court, he failed to qualify his words with the possibility of the legal change, of which Ergen was well aware and was in fact lobbying for.

EchoStar issued a statement viewing the ruling in a positive light, claiming the court found its practices "in substantial compliance" with copyright laws and ordered no damages.

EchoStar said it would appeal portions of the ruling, including a plea to keep current distant signal subscribers grandfathered. The company said about 10 percent of its distance signal subscribers could lose that service when the company re-examines who is qualified to receive them.

NAB hailed the ruling as a victory for free, local television viewers.

"The court found that EchoStar is illegally transmitting distant ABC, CBS, Fox and NBC stations to hundreds of thousands of ineligible subscribers," NAB said in a statement. "The Court found that EchoStar's violations were 'clearly willful.'"