Justice Warns Supreme Court on DBS

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The Department of Justice is all but predicting the loss of local TV service
for millions of satellite subscribers if the Supreme Court rules that a
local-TV-carriage law is unconstitutional.

Under a 1999 law under attack by EchoStar Communications Corp.,
direct-broadcast satellite carriers are required to carry every station in
markets where they carry any. Congress imposed this requirement if DBS firms
wanted to distribute local TV stations without the permission of copyright
holders.

In a Supreme Court brief filed May 13, solicitor general Theodore Olson
argued that if the 'carry-one, carry-all' regime violated the First Amendment,
the court would also be forced to invalidate the copyright license.

'[EchoStar and DirecTV Inc.] would thereby have lost the right to invoke any
statutory license to carry broadcast programming without the copyright owners'
authorization,' Olson said.

Without saying so directly, Olson painted a scenario under which the Supreme
Court could hand the DBS industry a First Amendment victory but a copyright-law
defeat that together would bar DBS carriers from providing local TV signals in
any practical manner.

However, Olson urged the Supreme Court not to review the case -- a move that
would allow a lower-court decision upholding the carry-one, carry-all regime to
stand.

EchoStar and DirecTV combined serve about 18 million subscribers. Millions of
them pay to receive a package of local TV signals, collectively among the
heaviest viewed channels offered.

DirecTV won't release local-TV-subscriber totals. But the company reported
that at the end of the first quarter, 60 percent of customers subscribed to
local TV service in the 41 markets where it is offered.

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