Commercial Satellite Subscribers Beware!

Originally published October 25, 2013.

Many businesses buy Satellite television service. When they buy it, they want it working and they want it cheap. Satellite operators are happy to oblige and sign ‘em up. They might get residential service or a form of commercial service. Who cares, it’s working right? Buyer beware!

It does matter. What many businesses don’t realize is that they need specific authorization to publicly show the programming. When the service is ordered and installed, this may not be made clear to the business. Without the right authorization, the business could unwittingly be violating federal law. And the law is punitive.

Eventually, satellite operators like DirecTV investigate their commercial subscribers. Here’s how they do it. The operator, through a law firm, sends a private investigator to the place of business. The PI takes video inside the establishment and may even ask the establishment to change the channels to see different programming. The video will show the number of patrons and the programming. The PI sends the video and pictures to the attorney.

Armed with this information, the operator’s attorney will send a demand letter to the business claiming the business violated federal law, 47 U.S.C. §605(e), for the unlawful public showing of satellite programming. The attorney will demand money. A lot of money. If the business doesn’t pay, the operator may sue and seek the following:

· Actual or Statutory damages which allows for a recovery between $1,000 and $10,000, in the courts discretion. See [§ 605(e)(3)(C)(i)(I)-(II)]; and
· Enhanced damages for a willful violation in an amount up to $100,000. See [§ 605(e)(3)(C)(ii)]; and
· Attorneys fees and costs. See [§ 605(e)(3)(B)(iii)].

The suit is usually brought in federal court, where the operator knows it will be more expensive to litigate. In 2012, the U.S. District in Wisconsin ruled against a bar/restaurant for showing a sporting event without authorization to 43 patrons. The court calculated statutory damages at $55 per patron, but added another $19,978 for enhanced damages and attorney’s fees and costs. An award of $24,000. For a small business that is a big hit. In that case bar/restaurant didn’t appear and that was held against them in terms of enhanced damages.

Add in attorney’s fees to defend the business, and it’s easy to see how significant the impact could be on a small business.

The lesson for business owners is to review the satellite service agreement. Now! Don’t wait for the demand letter to show up at your door.

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Mike Bradley
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