Thursday, January 12, 2012

FCC Should Act Against Unreasonable Satellite Dish Restrictions

The FCC is now considering a petition asking it to declare that Philadelphia's city ordinances restricting satellite dishes on family dwellings are preempted by federal rules. Those ordinances may place unreasonable burdens on direct broadcast satellite (DBS) dish installation, both for DBS consumers and dish installers, and, if so, they should be preempted.

But the significance of the petition extends far beyond Philadelphia. If other cities were to follow with their own unreasonably cumbersome dish restrictions, this could undermine the attractiveness and competitiveness of DBS service and thereby harm all consumers of video services. Moreover, the FCC's authority under the Commerce Clause to prevent states and localities from adopting unreasonable restrictions that interfere with the siting and construction of cell towers, microwave facilities, and other radio frequency devices may be weakened if the agency fails to act when localities impose unreasonable restrictions.

In today's video marketplace, DBS provides a vital role as a competing provider of video services. But in order for satellite TV providers to compete with cable, telco video providers, and online-delivered video, consumers of DBS services need to be able to install dishes on their property without unreasonable restrictions. So in Section 207 of the Communications Act, Congress granted the FCC authority to preempt county, city, or even landlord restrictions, on video-receiving devices like TV antennas and satellite dishes.

The FCC's "over-the-air-reception-device" (OTARD) rule preempts restrictions on the installation of dishes that "impairs the installation, maintenance, or use" of antennas or dishes that are one meter in diameter or less and located in areas within the exclusive use or control of the consumer. OTARD defines an impairing restriction as one that: "(i) Unreasonably delays or prevents installation, maintenance, or use; (ii) Unreasonably increases the cost of installation, maintenance, or use; or (iii) Precludes reception or transmission of an acceptable quality signal." Non-impairing restrictions must be applied in a non-discriminatory manner. Also, FCC precedents put the burden of satisfying OTARD on the enforcing entity.

In November 2011, Philadelphia imposed a thicket of restrictions on dish installations that, in several respects, appear to conflict with OTARD and undermine federal policy. The ordinances, for instance, would restrict placement of dishes on certain balconies and patio areas – areas most certainly within home dwellers' exclusive control – where the city believes that better alternative locations are available.

Furthermore, ordinance restrictions on placement of dishes on exterior walls of buildings in effect treat exterior walls as categorically beyond the exclusive control of the consumer. But many landlords and condo associations consent to tenants' control over exterior walls for dish installation in lease agreements and condo bylaws. And in several aspects, Philadelphia's ordinances appear to shift the burden of proving that dish placement and registration requirements are satisfied to DBS consumers or dish installers to demonstrate the material delay, signal reduction, and significant additional cost considerations. But OTARD puts the burden on the restricting entity, not the consumer.

Federal preemption of state and local police power regulations always involves delicacies and should be handled with care so as to respect legitimate state and local authority, especially with respect to public safety concerns. Yet, in important respects, Congress has authorized the FCC to preempt local restrictions that have the effect of impairing interstate commerce in competitive technology markets. In November 2009, for instance, the FCC exercised its authority under Section 332(c) to preempt local restrictions responsible for blocking or unreasonably delaying cell tower permit approvals to the detriment of the interstate commercial market in wireless services.

Congress also recognized the interstate commercial nature of nationwide DBS services. Congress sought to protect the rights of consumers to engage in interstate transactions with DBS providers, entrusting the FCC with exclusive regulatory authority over DBS. And Congress expressly empowered the FCC to prohibit local restrictions on dish installation that could otherwise pose barriers to DBS offering consumers an attractive competing video service. So it is incumbent on the FCC to take decisive measures to carry out Congress's objectives.

Onerous and intrusive local restrictions on satellite dish installation and their use interfere with the federal scheme for regulating DBS service. Restrictions that unreasonably burden dish installers and DBS consumers make DBS service a less attractive video service option. In order to protect the existing competitive market for the provision of video services, the FCC should act to ensure dish installation – and therefore DBS services – remains free from excessive and unwarranted restrictions imposed by localities. In particular, the FCC should address the kinds of problems exemplified by Philadelphia’s ordinances, lest it permit unreasonably burdensome restrictions in one major city to be replicated in cities across the nation.

A declaratory ruling by the FCC will clarify what kinds of local restrictions on dish installation are prohibited and what kinds of protections property owners and DBS consumers enjoy. In so doing, the agency will help protect consumer choice and a competitive video market. And, more broadly, the FCC will show its willingness to exercise agency authority under the Communications Act and the Commerce Clause to ensure that the channels of interstate commerce remain open to competitive technologies.