Court Hears Dish-Placement Case

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Landlords looking to control tenants' ability to install direct-broadcast satellite dishes on rental properties had their day in court last week.

A three-judge panel from the U.S. Court of Appeals for the District of Columbia Circuit heard arguments March 5 on a host of legal questions related to landlords' drive to overturn federal rules that protect the rights of apartment dwellers to install dishes on balconies, railings and other areas they control, but don't own.

Among the key issues addressed were whether the Federal Communications Commission had the authority to promulgate the rules, and if the rules themselves amounted to a taking of private property without just compensation-a violation of the Fifth Amendment.

The case, which won't be decided for several months, came before the court after the FCC in 1998 said that renters could install satellite dishes on porches, balconies and railings under their exclusive control, even if such action is prohibited by terms of their lease agreements.

Prior FCC rules had only protected homeowners from restrictions imposed by local governments and homeowners' associations.

Practically speaking, the FCC's rule affects only a relatively small number of the nation's 30 million apartment dwellers. The Building Owners and Managers Association International (BOMA), a large, Washington, D.C.-based landlord organization, noted that only 3 percent of apartment units have balconies. Those dwellings must have a southwest line of sight to receive DBS signals.

Given the small number of apartment dwellers who would benefit from the FCC rules, BOMA indicated that landlords are more interested in maintaining aesthetic control over their properties than in keeping DBS out. The trade group did not disclose how many of those 30 million apartment dwellers are homeowners, rather than renters.

"Economics-dollars to the landlords-is not driving this issue," said BOMA vice president of government and industry affairs Gerard Lederer following the hearing, underscoring the trade group's position.

At the hearing, BOMA attorney Matt Ames told the three judges-A. Raymond Randolph, Merrick B. Garland and Judith W. Rodgers-"there is nothing in the [Telecommunications Act of 1996] that says the [FCC] can regulate the landlord-tenant relationship."

The rules covered all rental properties: homes, offices, apartment buildings and shopping malls, Ames added.

However, the judges didn't seem overly impressed with that notion, and said the Telecommunications Act of 1996 ordered the FCC to draft rules to "prohibit restrictions" on a viewer's ability to receive DBS programming.

Building owners had concerns not only about their property rights and aesthetics, but about safety issues as well, Ames argued before the court. Along those lines, he told Randolph, Garland and Rodgers about one situation in which a tenant had drilled a DBS dish into a wood plank and placed it-ungrounded-outside a window.

Had the dish been hit by lightning, it could have blown up the TV set, BOMA's barrister explained.

Garland rejoined: "If they permitted that, they should be overturned."

The judge then spun the issue some more by questioning whether a landlord's property rights outweighed the benefit of a law that allows a tenant to install a fire extinguisher or a smoke detector.

He then took that position a step further, asking if a landlord's property rights with respect to DBS dishes could go so far as to allow building owners to ban children from rental properties.

"Why is a child different from a satellite dish?" Garland said.

The judges also questioned whether the FCC's rules violated the Fifth Amendment's anti-takings provision. Compensation issues could be resolved if landlords charged tenants a fee to install and maintain dishes, the judges noted.

For his part, Randolph said he was unsure how to rule on the takings issue, owing to conflicting U.S. Supreme Court decisions.

"I must admit a lot of the lines the Supreme Court has drawn are difficult to reconcile," he said.

The landlords' case against the FCC would have been stronger had the agency ruled that DBS providers DirecTV Inc. and EchoStar Communciations Corp. had the right to mount dishes on rental properties, FCC lawyer Gregory M. Christoper told the judges. He warned that if the court holds that the rules are a taking, it could lead to "a raid on the public fisc."

Were Congress truly worried about such a raid on the Treasury, Randolph countered, it had the right-with presidential approval-to void the FCC rules within 60 days under the Congressional Review Act.

In his brief presentation, DirecTV attorney Richard P. Bress said the DBS provider urged the agency to extend the rules to such common places as roofs, patios and party areas, but the FCC declined to take that step.

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