DBS Claims Must-Carry Victory

The direct-broadcast satellite industry said Monday that it scored a legal
procedural victory against the federal government and the broadcast industry in
connection with the mandatory carriage of local TV signals.

The Satellite Broadcasting & Communications Association said in a
statement that the U.S. Court of Appeals for the Fourth Circuit agreed to go
forward with the SBCA's and EchoStar Communications Corp.'s First Amendment
challenge to the Federal Communications Commission's DBS must-carry rules.

The SBCA declared victory because the Department of Justice and the National
Association of Broadcasters had asked the court to lay the case aside until
after the FCC had evaluated petitions for reconsideration of the rules.

The DBS opponents also said the challenge to the rules should wait until
after a U.S. District Court in Alexandria, Va., had ruled on the satellite
industry's constitutional challenge to the 1999 law that authorized the FCC to
draft the rules.

Under the Satellite Home Viewer Improvement Act, DBS carriers are required to
carry all local TV stations in a served market starting in 2002. The DBS
industry said the law violates the First Amendment, while broadcasters claimed
that must-carry was the trade-off for giving DBS a free copyright license to
retransmit local TV stations.

The Fourth Circuit handed down its decision March 28 in a one-sentence order
stating that the request to hold the FCC-rules case in abeyance had been

The DBS industry is fighting must-carry on three fronts. It has asked the FCC
to reconsider its rules, asked a U.S. District Court to void the federal law as
unconstitutional and asked a federal court of appeals to toss out the FCC's
rules on constitutional grounds.

'With satellite must-carry scheduled to go into effect Jan. 1, 2002, time is
of the essence,' SBCA president Chuck Hewitt said in a prepared