CBS Broadcasting, Inc. v. Echostar Communications Corp.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JULY 07, 2008
No. 07-10020 THOMAS K. KAHN
________________________ CLERK

D. C. Docket No. 98-02651-CV-WPD

CBS BROADCASTING INC., et al.,

Plaintiffs-Counter-
Defendants,

FOX BROADCASTING COMPANY,
FBC TELEVISION AFFILIATES ASSOCIATION,
ABC TELEVISION AFFILIATES ASSOCIATION,
NBC TELEVISION AFFILIATES,
CBS TELEVISION AFFILIATES ASSOCIATION,

Plaintiffs-Counter-
Defendants-Appellants-
Cross-Appellees,

versus

ECHOSTAR COMMUNICATIONS CORPORATION,
d.b.a. DISH Network,
ECHOSTAR SATELLITE CORPORATION,
SATELLITE COMMUNICATIONS OPERATING CORPORATION,
DIRECT SAT CORP.,

Defendants-Counter-
Claimants-Appellees,
MICHAEL MOUNTFORD,
NATIONAL PROGRAMMING SERVICE, LLC,

Proposed
Intervenors-
Cross-Appellants.

________________________

No. 07-10178
________________________

D. C. Docket No. 98-02651-CV-WPD

CBS BROADCASTING INC., et al.,

Plaintiffs-Counter-
Defendants,

FOX BROADCASTING COMPANY,
FBC TELEVISION AFFILIATES ASSOCIATION,
ABC TELEVISION AFFILIATES ASSOCIATION,
NBC TELEVISION AFFILIATES,
CBS TELEVISION AFFILIATES ASSOCIATION,

Plaintiffs-Counter-
Defendants-Appellants,

versus

ECHOSTAR COMMUNICATIONS CORPORATION,
d.b.a. DISH Network,
ECHOSTAR SATELLITE CORPORATION,
SATELLITE COMMUNICATIONS OPERATING CORPORATION,
DIRECT SAT CORP.,

2
Defendants-Counter-
Claimants-Appellees.

________________________

Appeals from the United States District Court
for the Southern District of Florida
_________________________

(July 7, 2008)

Before WILSON, COX and BOWMAN,* Circuit Judges.

WILSON, Circuit Judge:

The issue before us is whether the nationwide, permanent injunction

mandated by the Satellite Home Viewer Act of 1988, Pub. L. No. 100-667, tit. II,

102 Stat. 3949 (“SHVA”), prohibits Appellee EchoStar Communications

Corporation (“EchoStar”) from leasing its transponder to National Programming

Service, LLC (“NPS”), thereby allowing NPS to retransmit distant network

programming to eligible subscribers. See 17 U.S.C. § 119(a)(7)(B)(i). We agree

with the district court that EchoStar is not in violation of § 119(a)(7)(B)(i). We

affirm.

I. BACKGROUND

Appellant Fox Broadcasting Company (“Fox”) is the respective owner of

*
Honorable Pasco M. Bowman II, United States Circuit Judge for the Eighth Circuit,
sitting by designation.

3
the Fox television network. Fox possesses the copyrights or exclusive rights in

numerous television programs broadcast by Fox network stations. Appellants

CBS Television Affiliates Association, ABC Television Affiliates Association,

FBC Television Affiliates Association, and NBC Television Affiliates are the

respective trade associations representing hundreds of CBS, ABC, Fox and NBC

affiliate stations. All appellants will hereafter be referred to as the “Networks.”

During the 1990s, EchoStar began providing satellite television

programming to subscribers with small (18 inch) satellite dishes, and conducted its

business under the name “DISH NETWORK.” The SHVA provided satellite

carriers such as EchoStar a compulsory, statutory license to engage in secondary

transmissions1 of copyrighted distant network programming2 to unserved

1
A secondary transmission (also termed “retransmission”) is defined as “the further
transmitting of a [broadcast station’s] primary transmission simultaneously with the primary
transmission.” 17 U.S.C. § 111(f). A “primary transmission” is defined as “a transmission made
to the public by the transmitting facility whose signals are being received and further transmitted
by the secondary transmission service, regardless of where or when the performance or display
was first transmitted.” Id.
2
“Distant network signals are network stations from outside a subscriber’s market area.
For example, a person who lives in Fort Lauderdale but receives an ABC, CBS, Fox or NBC
network station from New York City is receiving ‘distant network programming’ or ‘distant
network stations.’” CBS Broad., Inc. v. EchoStar Commc’ns Corp., 450 F.3d 505, 508 n.1 (11th
Cir. 2006) (quoting CBS Broad., Inc. v. EchoStar Commc’ns Corp., 276 F. Supp. 2d 1237, 1241
(S.D. Fla. 2003)).

4
households.3

In November 1998, the Networks filed suit in the United States District

Court for the Southern District of Florida claiming that EchoStar was infringing

on the Networks’ copyrights by providing distant network programming to

served—as opposed to unserved—households. In 2003, after a two-week bench

trial, the district court found that EchoStar retransmitted the Networks’ programs

to hundreds of thousands of served households, which constituted “willful or

repeated” copyright infringement under 17 U.S.C. § 119(a)(7)(A). CBS Broad.,

Inc. v. EchoStar Commc’ns Corp., 450 F.3d 505, 509, 516 (11th Cir. 2006). The

district court declined to issue the severe “pattern or practice” injunction under 17

U.S.C. § 119(a)(7)(B); instead, it “crafted an injunction designed to remedy . . .

individual violations of the Act.” Id. at 517. On appeal, we held that EchoStar

had indeed engaged in a “pattern or practice” of secondary transmissions to served

households on a nationwide basis in violation of § 119(a)(7)(B). Id. at 526. We

remanded the case to the district court for the entry of a nationwide permanent

injunction barring EchoStar from providing distant network programming

pursuant to § 119(a)(7)(B). Id. at 527. On remand, the district court entered the

3
Unserved households are households that are unable to receive network programming at
a specified level of intensity through the use of conventional rooftop antennas. Echostar, 450
F.3d at 508.

5
mandated permanent injunction on October 20, 2006, which was to take effect on

December 1, 2006.

On November 29, two days before the effective date of the injunction,

EchoStar entered into a lease agreement (“Lease Agreement”) with NPS, a satellite

programming provider that has been in the business of providing television

programming (including distant network broadcast signals) for more than ten

years.4 Under the Lease Agreement, NPS leases a transponder5 on EchoStar’s

satellite.6 In exchange for use of the transponder, NPS pays EchoStar $150,000

per month.7 The rent payments are not tied to providing distant network

programming signals to subscribers. NPS is obligated to make the payments for at

least two years from the date of the contract whether or not NPS signs up any

4
NPS and EchoStar are separate and distinct companies that do not share any officers,
directors, management, employees, or shareholders. Neither has an ownership interest in the
other, and NPS has done business with, and competed against, EchoStar in the past. (NPS’s
Response Brief at 8.)
5
A transponder collects signals sent up from earthbound transmission stations and
manipulates the signals by reassigning them to different frequencies. The transponder then
transmits the signals back down to individual satellite dishes owned by the subscribing viewer.
(Appellants’ Initial Brief at 5.)
6
The events leading up to the Lease Agreement had been set in place six months earlier,
when NPS approached EchoStar with the idea of offering distant network channels to EchoStar’s
unserved subscribers who were going to lose service as a result of the anticipated permanent
injunction. (NPS’s Response Brief at 9.) NPS has entered into similar lease agreements with
companies other than EchoStar. (Id. at 10.)
7
NPS also pays “an interim $5,000 monthly antenna fee” to NPS. (Appellees’ Response
Brief at 15.)

6
subscribers for distant network programming. EchoStar does not receive, or share

in, any revenues or profits received by NPS’s provision of distant network

programming. In addition, the Lease Agreement:

(1) Establishes NPS as the owner of distant network subscriber information and

other related rights;

(2) Requires NPS to be responsible for the collection, transport, delivery,

reception, monitoring, and uplinking of all signals to be transmittted using the

leased transponder;

(3) Permits NPS to offer distant network channels to all eligible consumers, not

just EchoStar subscribers;

(4) Prevents EchoStar from determining subscriber eligibility, or from activating

or de-activating distant network subscribers; and prevents NPS from using

EchoStar’s call center, subscriber management, and other systems to determine

subscriber eligibility, activate, and deactivate subscribers;

(5) Requires NPS to independently contract with Decisionmark8 to determine

subscriber eligibility;

(6) Requires consumers to contact NPS directly in order to subscribe to distant

8
Decisionmark Corporation is a third party vendor who uses an approved scientific
methodology to determine which potential subscribers are unserved and therefore eligible to
receive distant network signals.

7
network channels;

(7) Prohibits EchoStar from disconnecting distant nework programming to NPS

customers, even if those customers are also EchoStar customers and fail to pay

EchoStar for the programming they receive from EchoStar;

(8) Prevents EchoStar from billing or collecting payments from distant network

subscribers and requires that NPS use its own systems for billings and collection

(if EchoStar and NPS share the same customer, the customer receives and pays

two separate bills);

(9) Permits NPS to charge whatever price it desires for the services it delivers,

including distant network programming;

(10) Requires NPS to pay all costs associated with NPS’s provision of distant

network programming to eligible consumers;

(11) Requires NPS to pay all taxes related to distant network subscribers; and

(12) Requires NPS to ensure compliance with Section 119 of the SHVA, including

the payment of royalty fees and filing of necessary submissions.

In compliance with the injunction, EchoStar disconnected distant network

channels to all of its approximately 900,000 distant network subscribers, which

has caused EchoStar a loss of more than twenty-five million dollars annually.

Upon becoming aware of the Lease Agreement, the Networks moved the

8
district court to issue an order to show cause why EchoStar and NPS should not be

held in contempt of the October 20 injunction. On December 1, 2006, the

Networks alternatively moved for clarification9 of the October 20 injunction

prohibiting the EchoStar-NPS lease agreement. The district court denied both

motions, holding that the injunction did not prohibit EchoStar from acting as a

passive conduit for NPS’s retransmissions of distant network programming:

Neither the Act nor the mandate impose a requirement that EchoStar
refrain from any business with customers formerly receiving distant
network signals, nor does it prohibit other providers from transmitting
those signals to those former customers who qualify as unserved under the
Act.
....
As NPS points out, the injunction required for pattern or practice
violations bars not only unlawful conduct but also would otherwise bar the
legitimate provision of services under the Act, i.e., providing distant
network services to unserved households. . . . What Plaintiffs seek goes
beyond that, seeking to bar not only EchoStar from providing such
services but also unaffiliated third parties who seek to use EchoStar’s
already existing equipment to fill a gap in the market. Plaintiffs have not
demonstrated that the agreement between EchoStar and NPS is anything
but an arms-length business transaction to lease satellite space, or that
EchoStar is, at this point, anything more than a conduit for the signals
which will be sent by NPS. . . . That EchoStar has found a way to
minimize the harm to its customers and itself, and likely prevent a windfall
to its competitors, does not require this Court to modify the injunctive
relief entered to encompass conduct not intended to be banned by the Act
or the Eleventh Circuit’s mandate, and the Court does not find good cause

9
The district court construed the motion for clarification as a motion to modify the
injunction, determining that the Networks sought to broaden the scope of the injunction to
include the lease arrangement between EchoStar and NPS. (D.E. 1121 at 4-5.)

9
to enter such broad relief.

(D.E. 1121 at 5-6.)

On appeal, the Networks ask us to reverse the district court and hold that

EchoStar’s participation in the Lease Agreement violates the injunction required

by § 119(a)(7)(B)(i).

II. STANDARD OF REVIEW

Typically, a district court’s refusal to clarify or modify an injunction is

reviewed for an abuse of discretion, Dillard v. Baldwin County Comm’rs, 376 F.3d

1260, 1264-65 (11th Cir. 2004), but a court “by definition abuses its discretion

when it makes an error of law,” Koon v. United States, 518 U.S. 81, 100, 116 S.

Ct. 2035, 2047, 135 L. Ed. 2d 392 (1996). Here, where the interpretation of a

statute is at stake, our review is de novo. United States v. Murrell, 368 F.3d 1283,

1285 (11th Cir. 2004).

III. DISCUSSION

A. The Compulsory, Statutory License Under Section 119(a)

Section 119(a)(2) provides satellite carriers with a compulsory, statutory

license to conduct secondary transmissions of distant network programming to

unserved households. 17 U.S.C. § 119(a)(2)(A)-(B)(i). To secure and maintain

the license, the satellite carrier must satisfy a number of statutory requirements.

10
The satellite carrier must file with the network that owns or is affiliated with

the network station the following submissions: (1) a list to be submitted 90 days

after commencement of secondary transmissions identifying the name and address

of all subscribers to whom distant network programming is retransmitted (17

U.S.C. § 119(a)(D)(i)(I)); (2) a list to be submitted 90 days after commencement

of secondary transmissions that is aggregated by a designated market area and

indicates persons being served pursuant to § 119(a)(3) relating to significantly

viewed stations (17 U.S.C. § 119(a)(D)(i)(II)); (3) a list to be submitted every

month identifying any persons who have been added or dropped as subscribers

under § 119(a)(D)(i)(I) (17 U.S.C. § 119(a)(D)(ii)(I)); and (4) a list to be

submitted every month identifying any persons whose service pursuant to §

119(a)(D)(i)(II) has been added or dropped (17 U.S.C. § 119(a)(D)(ii)(II)).

The satellite carrier must also, on a semiannual basis, deposit with the

period, specifying the names and locations of all superstations and network

stations whose signals were retransmitted to subscribers at any time during that

period, the total number of subscribers that received such retransmissions, and

other such data as the Register of Copyrights may from time to time prescribe by

regulation. 17 U.S.C. § 119(b)(1)(A).

11
In addition, the satellite carrier must pay a royalty fee for a 6-month period,

computed by multiplying the total number of subscribers receiving each secondary

transmission of each superstation or network station during each calendar month

by the appropriate rate. 17 U.S.C. § 119(b)(1)(B). Such fees are ultimately

distributed (after reasonable costs incurred by the Copyright Office are deducted)

to copyright owners whose works were included in a secondary transmission made

by a satellite carrier during the applicable 6-month period. 17 U.S.C. § 119(b)(2)-

(3).

In the event the satellite carrier sends secondary transmissions to

subscribers who are not eligible to receive the transmission (e.g., served

subscribers), there are two possible penalties. If the retransmission was “willful or

repeated,” the satellite carrier is liable for copyright infringement and statutory

damages up to $5 for each subscriber for each month. 17 U.S.C. §

119(a)(7)(A)(ii).10 A more severe penalty (the one that is at issue in this case) is

applicable to the satellite carrier engaged in a willful or repeated “pattern or

practice.” 17 U.S.C. § 119(a)(7)A)(ii). In that instance, in addition to the

remedies set forth in § 119(a)(7)(A)(ii), the following penalty applies:

10
No damages, however, shall be awarded if the satellite carrier took corrective action by
promptly withdrawing service. 17 U.S.C. § 119(a)(7)(A)(ii).

12
[T]he court shall order a permanent injunction barring the secondary
transmission by the satellite carrier, for private home viewing, of the
primary transmissions of any primary network station affiliated with the
same network, and the court may order statutory damages of not to exceed
$250,000 for each 6-month period during which the patter or practice was
carried out.

17 U.S.C. § 119(a)(7)(B)(i).

The scope of the § 119(a)(7)(B)(i) injunction (“the injunction”) is tailored to the

geographic area where the “pattern or practice” was carried out. 17 U.S.C. §

119(a)(7)(B)(i)-(ii). Because EchoStar was found to have engaged in a “pattern or

practice” that was carried out on a substantially nationwide basis, the injunction

set against it is permanent and nationwide.

B. Whether EchoStar is a Satellite Carrier Retransmitting Distant Network
Programming

The Networks argue that the injunction, which enjoins a satellite carrier’s

secondary transmissions of distant network programming, prohibits the Lease

Agreement because EchoStar, even in its passive role, continues to act as a

satellite carrier engaged in such retransmissions.11

11
The parties agree that § 119(a)(7)(B)(i) does not prohibit EchoStar from acting as a
satellite carrier with respect to retransmissions of local network programming pursuant to the
compulsory license under 17 U.S.C. § 122. (Appellants’ Initial Brief at 7.) Section
119(a)(7)(B)(i) only reaches EchoStar acting as a satellite carrier with respect to retransmissions
of distant network programming under 17 U.S.C. § 119(a)(2)(A)-(B)(i). See CBS Broad., Inc. v.
EchoStar Commc’ns Corp., 450 F.3d 505, 527 (11th Cir. 2006) (“[W]e hold that the district court
is required to issue a nationwide permanent injunction barring the provision of distant network
programming pursuant to the Act’s statutory license”).

13
The parties disagree over whether EchoStar is a “satellite carrier,” which is

defined as:

[A]n entity that uses the facilities of a satellite or satellite service licensed
by the Federal Communications Commission . . . to establish and operate a
channel of communications for point-to-multipoint distribution of
television station signals, and that owns or leases a capacity or service on a
satellite in order to provide such point-to-multipoint distribution.

17 U.S.C. § 119(d)(6).

Thus, to be a satellite carrier, an entity must: (1) use the facilities of a

satellite to establish and operate a channel of communications for point-to-

multipoint distribution of television signals; and (2) own or lease a capacity or

service on a satellite to provide point-to-multipoint distribution. The parties agree

that EchoStar meets the second prong, i.e., EchoStar owns the capacity to provide

point-to-multipoint distribution. The parties’ disagreement is centered on whether

EchoStar, despite its passive role, continues to use the facilities of the satellite for

the purpose of establishing and operating a channel of communications for point-

to-multipoint distribution of television station signals.

“‘The first rule in statutory construction is to determine whether the

language at issue has a plain and unambiguous meaning with regard to the

particular dispute. If the statute’s meaning is plain and unambiguous, there is no

need for further inquiry.’” United States v. Silva, 443 F.3d 795, 797-98 (11th Cir.

14
2006) (per curiam) (quoting United States v. Fisher, 289 F.3d 1329, 1337-38 (11th

Cir. 2002)). In determining the plain meaning, “we will not ‘look at one word or

term in isolation, but instead [will] look to the entire statutory context.’” Id.

(alteration in original) (quoting United States v. DBB, Inc., 180 F.3d 1277, 1281

(11th Cir. 1999)).

The Networks fail to convince us that EchoStar is “us[ing] the facilities of a

satellite . . . to establish and operate a channel of communications for point to

multipoint distribution.” Importantly, the verbs are in the present tense. The

satellite carrier must be in the continuing enterprise of establishing and operating

the “channel of communications for point-to-multipoint distribution.” The

Networks point out that EchoStar continues to have operational control over the

transmission infrastructure of the satellite because NPS is without the requisite

license to operate an apparatus for the transmission of satellite television

broadcasts under 47 U.S.C. § 301. The Networks, however, fail to provide any

detail on the intricacies and scope of EchoStar’s operational control over the

transmission infrastructure. (See Appellants’ Initial Brief at 24-25; Appellants’

Response and Reply Brief at 9 n.3, 27-28.) Our sense from the Lease Agreement,

however, is that EchoStar’s role is marginal and can only be viewed as ensuring

the proper, technical, functioning of the transponder and the satellite as a whole.

15
(D.E. 1071-4 at ¶¶1.A, 7.B.) It is NPS that “is responsible for providing, operating

and maintaining the equipment necessary to access the [s]atellite and [satellite

service].” (Id. at ¶ 7.A.) It is NPS that is responsible for the collection, transport,

delivery, reception, monitoring, and uplinking of all signals to be transmitted. (Id.

at ¶¶ 1.A, 4.A.) It is NPS that is responsible for determining the type of

retransmission (e.g., distant or local), the content of the retransmission, and the

recipient of the retransmission. And, it is NPS that is responsible for determining

subscriber eligibility, for activating or de-activating subscribers, and for obtaining,

servicing, and retaining subscribers. In light of these facts, we are convinced that

only NPS can fairly be viewed as establishing and operating the channel of

communications for point-to-multipoint distribution.

This conclusion that only NPS qualifies as a satellite carrier engaged in the

retransmission of distant network programming is all the more clear upon

considering the broader, statutory framework. The SHVA’s definition of “satellite

carrier” clearly contemplates a satellite owner leasing out its capacity (i.e.,

transponder and other equipment). 17 U.S.C. § 119(d)(6). EchoStar tells us that

the leasehold arrangement is common in the industry and we are given no reason

to disbelieve them. In such a leasing arrangement, the statute makes clear that

lessee becomes a satellite carrier. Id. Just as any other satellite carrier may do, a

16
lessee satellite carrier may retransmit distant network programming to eligible

subscribers pursuant to the compulsory, statutory license provided by 17 U.S.C. §

119(a)(2)(A)-(B)(i). The lessee satellite carrier may only do so, however, if it

satisfies all of the requirements for securing and maintaining the license, i.e., the

initial and monthly submission of both subscriber lists and designated market lists,

the deposit of an account statement into the Register of Copyrights on a

semiannual basis, and the payment of royalty fees on a semiannual basis. The

Networks do not contend otherwise.12

From this premise, it follows that the lessor cannot be a satellite carrier

engaging in the retransmission of distant network programming simultaneously

with the lessee’s own retransmissions of the same kind. For if this were the case,

the lessor would be equally subject to the statutory requirements for securing and

maintaining a compulsory, statutory license. The statutory language relating to the

license and its requirements do not differentiate between lessors and lessees.

Thus, both would be required to file initial and monthly lists, file semiannual

account statements, and pay semiannual royalty fees. But, nowhere does the

statutory language infer such duplicity of efforts and expense—let alone a windfall

12
As previously mentioned, NPS is solely responsible for the necessary filings and
payments of royalty fees pursuant to Section 119 of the SHVA.

17
to the copyright owners for twice the amount of royalty fees. It has to be one or

the other; they cannot both be satellite carriers. The statute clearly contemplated

lessees obtaining the status of satellite carriers, and the same clear intent is not

expressed with respect to lessors.

This reading is also bolstered by pragmatic concerns. To require the passive

lessor to satisfy § 119(a)’s requirements would make little sense given that the

lessor has no knowledge of, or contact with, the subscribers. Subscriber

information is the key to calculating the royalty fee and creating the lists and

account statement. The lessee is in the best position to do this.

In addition, EchoStar directs our attention to the November 2005 Report

and Order issued by the FCC. Therein, the FCC acknowledged that certain

“satellite carriers . . . often lease capacity from another entity that is licensed to

operate the satellite used to provide service to subscribers.” Implementation of the

Satellite Home Viewer Extension and Reauthorization Act of 2004,

20 F.C.C.R. 17278, 17302 (Nov. 2, 2005). In its address of the leasing

arrangement, the FCC gave no indication that the lessor entity qualifies as a

satellite carrier, only that the lessee carrier so qualifies. Id. at 17302-03.

The Networks claim that allowing EchoStar to function as a passive lessor

and obtain rent payments circumvents the severe penalty of § 119(a)(7)(B)(i). We

18
are unpersuaded. It is undisputed that EchoStar has lost all revenue previously

earned through distant network programming at a cost of $25 million per year.

Likewise, there is no contention of foul play relating to the rent payments, i.e., no

one contends that NPS’ rent payment of $150,000 per month fails to represent the

fair market value of leasing a transponder. EchoStar no longer has any control

over the pricing, billing, or collection of payments for distant network

programming, and does not receive, or share in, any revenues or profits received

by NPS’s provision of distant network programming. Put simply, EchoStar is out

of the distant network programming business. Section 119(a)(7)(B)(i) does not

bar the leasing out of a transponder, and we will not prohibit the Lease Agreement

absent a clear indication from Congress to do so.

We conclude, therefore, that EchoStar, as a passive lessor of its satellite

equipment, does not qualify as a satellite carrier with respect to NPS’s

retransmissions of distant network programming. Because § 119(a)(7)(B)(i) only

reaches EchoStar as a satellite carrier engaged in retransmitting distant network

programming, EchoStar is not in violation of the injunction.13

13
EchoStar contends that the “passive carrier exemption” of § 111(a)(3) applies to
EchoStar in its current role as a passive lessor and therefore exempts EchoStar from violating the
§ 119(a)(7)(B)(i) injunction. Whether EchoStar qualifies for the § 111(a)(3) exemption is
irrelevant, however, because that provision only exempts carriers from copyright infringement
liability, see § 111(a), and has no bearing on whether EchoStar is in violation of the permanent,
nationwide injunction pursuant to § 119(a)(7)(B)(i).

19
C. Whether the Agreement Violates the SHVERA

In addition, the Networks argue that the Lease Agreement violates the “if

local, no distant” provision of the Satellite Home Viewer Extension and

Reauthorization Act of 2004, Pub. L. No. 108-447, tit. IX, 118 Stat. 3393

(“SHVERA”). The Networks cite to the following provisions:

(C) Future applicability
A satellite carrier may not provide a distant analog signal (within the
meaning of subparagraph (A) or (B)) to a person who--
...
(ii) at the time such person seeks to subscribe to receive such secondary
transmission, resides in a local market where the satellite carrier makes
available to that person the analog signal of a local network station
affiliated with the same television network pursuant to section 338 of this
title, and the retransmission of such signal by such carrier can reach such
subscriber.
(D) Special rules for distant digital signals
....
(iv) Local-to-local digital markets
After the date on which a satellite carrier makes available the digital signal
of a local network station, the carrier may not offer the distant digital
signal of a network station affiliated with the same television network to
any new subscriber to such distant digital signal after such date, except
that such distant digital signal may be provided to a new subscriber who
cannot be reached by the satellite transmission of the local digital signal.

47 U.S.C. § 339(a)(2)(C)(ii), D(iv).

The Networks argue that the above provisions “bar[] a satellite carrier from

retransmitting the signals of a distant network affiliate to new customers in a

geographic market in which the same satellite carrier is also retransmitting the

20
signals of a local affiliate of the same network, even if those customers are in areas

‘unserved by conventional terrestrial broadcasts.’” (Appellants’ Initial Brief at 37-

38.) Under the Networks’ own reading of SHVERA, the local and distant signals

must derive from the same satellite carrier. While EchoStar continues to run its

own business by retransmitting local network programming as a satellite carrier,

EchoStar no longer retransmits distant network programming as a satellite carrier.

Under the Lease Agreement, NPS is the sole satellite carrier retransmitting distant

network programming. Since EchoStar is not a satellite carrier retransmitting both

distant and local network programming, EchoStar is not in violation of the

SHVERA.

IV. CONCLUSION

For the foregoing reasons, we conclude that EchoStar is not prohibited

under § 119(a)(7)(B)(i) from leasing its transponder to NPS under the Lease

Agreement. Accordingly, we affirm.14

AFFIRMED.

14
Because we affirm the district court’s denial of the Networks’ motion to modify the
injunction, we need not reach the merits of NPS’s cross-appeal relating to the district court’s
denial of NPS’s motion to intervene.