Set-aside of DBS capacity for noncommercial use upheld by appeals court

By Steve Behrens

A federal appeals court has upheld the little-noticed 1992 law setting aside 4-7 percent of direct broadcast satellite capacity for “noncommercial programming of an educational or informational nature.”

The Aug. 30, 1996, decision, by a three-judge panel of the U.S. Court of Appeals in Washington, D.C. [text of ruling], overturned a 1993 District Court decision that ruled the DBS set-aside had violated DBS operators’ First Amendment rights.

If the decision isn’t appealed successfully to the Supreme Court, the set-aside means that a DBS operator with 175 channels — that’s how many DirecTV claims — will have to offer 7-12 channels of noncommercial fare on its menu.

The ruling provides ‘a great basis’ for arguing that broadcasters airing multiple digital channels be required to provide some noncommercial programming, says Sohn. ‘Making that case has become a lot easier with this decision.’

America’s Public Television Stations, which intervened to support the set-aside along with CPB and PBS, took the ruling as a victory for historic legal principles. APTS, which worked to get the DBS provision into the 1992 Cable Act, has been trying to establish the idea of “public right of way” in all the new distribution media.

“We were delighted with the opinion,” said APTS Vice President Marilyn Mohrman-Gillis. “It reaffirmed longstanding policy of access for educational services.”

Gigi Sohn, deputy director of the Media Access Project, which represented several public-interest groups including the Consumer Federation of America and Center for Media Education, said the ruling provides “a great basis” for arguing further that terrestrial broadcasters airing multiple channels over their new digital TV frequencies should be required to provide some noncommercial programming.

“Making that case has become a lot easier with this decision,” says Sohn. “For the first time, broadcasters will be multichannel providers. Why shouldn’t they have similar obligations for noncommercial access, just like cable and DBS?”

The court ruling upheld the requirement that DBS operators reserve part of their channel capacity as a condition of being permitted to use a scarce public commodity — the microwave channels that they use to send and receive programming. That’s much the same rationale that Congress and the courts have used for decades to justify the reservation of terrestrial channels for public broadcasting.

The judges did not dispute complaints that the set-aside interferes with the free speech of media companies; instead, it ruled that it was more important to assure the public’s access to diverse information sources. The net effect of the law “is to promote speech, not to restrict it,” the court declared.

PBS is just beginning to consider what the set-aside could mean in practical terms, says Executive Vice President Bob Ottenhoff.

“I think the DBS provider is going to say, ‘I need to have a well-branded service, a service that provides significant programming value, that meets some nationwide audience criteria’,” says Ottenhoff. “We’re going to try to convince them that working with PBS and public television can attract an audience and get them some good will.”

One program option, he says, might be a “Ready to Earn” channel that offers college-credit telecourses related to coursework for entire degrees at participating colleges. That option would be relatively inexpensive for public TV to provide, he adds, because PBS already has licenses to use many telecourses for direct satellite broadcasts. Students would pay for the telecourses indirectly through college tuition.

“It will have to be done inexpensively, because I don’t think the revenues will be very significant,” Ottenhoff adds.

PBS already has been talking with several of the DBS firms now broadcasting, and three have taken on the generic “Schedule X” feed, which provides revenues to PBS and all member stations. Those three are DirecTV and newer competitors EchoStar and AlphaStar. A fourth service, PrimeStar, continues to carry WHYY, Philadelphia, as its public TV channel.

The ruling comes as DBS begins to boom, with growing competition and falling prices. The 18-inch receivers used by most of the operators have plummeted to $200 or $300 each as new manufacturers and operators joined the market. Altogether, the operators claim nearly 3.5 million subscribers.

The DBS operators have not loudly opposed the set-aside and didn’t fight it in court; the appellant in the recent case was Time Warner, which fought nearly everything in the Cable Act.

The set-aside “may mean absolutely no change at all” for the DBS operators, says Bob Scherman, editor and publisher of the Washington-based trade newspaper Satellite Business News.

That’s why DBS operators weren’t fighting the law in court, Scherman figures. They want to see whether the FCC puts teeth in rules that will define the obligation before deciding whether to appeal an apple-pie provision like the set-aside. “It’s the kind of thing that congressmen throw into bills to make themselves look good. Who’s going to oppose that?”

DBS firms weren’t eager to comment. Spokespersons for DBS operators USSB, AlphaStar and EchoStar did not return calls from Current.

The set-aside might fall short of opening the way for many new noncommercial channels because existing noncommercial services could take many of the required channels — for instance, east and west coast feeds of PBS, C-SPAN-1 and C-SPAN-2, the foreign-language service SCOLA, and WAM!, a new “kidz” network from Encore.

Last month’s court decision not only upheld the DBS set-aside, which was part of the 1992 Cable Act, but also its rate regulation provisions and the 1984 Cable Act’s public-access channel and leased-access provisions.

Both sides in Time Warner v. FCC took the case to the appeals court last year, dissatisfied with lower court rulings.

Must-carry provisions are being considered in a separate case that goes before the Supreme Court on the first day of its new term, Oct. 7, according to Mohrman-Gillis. Last year a U.S. three-judge district court upheld the must-carry law on a 2-1 decision.

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