Dish Freed From U.S. Rules on Cable Set-Top Boxes

Dish Network Corp. (DISH) won a federal appeals court ruling that frees pay-television providers from U.S. regulations blocking the use of some techniques to prevent illicit copying of programs.

A three-judge panel of the U.S. Court of Appeals in Washington today said that the Federal Communications Commission lacked authority to apply the rules to satellite companies, saying Congress didn’t give the agency explicit direction regarding satellite systems. The court threw out the rules from 2003.

The rules prevented pay-TV companies from remotely shutting off particular outputs in a subscriber’s home equipment such as a set-top box. Cable companies argued that the ban should apply to all pay-TV companies to preserve a level playing field in negotiations for access to premium content, the FCC said in its 2003 order.

The FCC based its rules on a 2002 agreement between the National Cable & Telecommunications Association, which represents companies including largest U.S. cable operator, Comcast Corp. (CMCSA), and No. 2 Time Warner Cable Inc. (TWC), and a consumer- electronics group, whose members include TV makers such as Sony Corp. and LG Electronics Inc. (066570)’s Zenith Electronics Corp.

FCC Negotiations

Satellite providers complained to the FCC that that they were excluded from those negotiations.

The FCC is reviewing the court’s order, Justin Cole, an FCC spokesman, said in an e-mail.

Brian Dietz, a spokesman for the National Cable & Telecommunications Association, declined to comment on the ruling. The Washington-based trade group intervened in the case backing the FCC.

Bob Toevs, a spokesman for Englewood, Colorado-based Dish, didn’t immediately respond to a phone message seeking comment on the decision.

The case is Echostar Satellite LLC v. Federal Communications Commission, 04-1033, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net

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