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Cable Technology Feature Article

March 25, 2009

DISH Network Sued By FTC over Do Not Call Violations, Denies Allegations

By Brendan B. Read, Senior Contributing Editor

In what may be a groundbreaking case, Dish Network has been hit with a lawsuit by the U.S. federal government, charging that the firm directly and through its authorized dealers called numerous consumers who had placed their numbers on the National Do Not Call (DNC) Registry.
The U.S. Department of Justice, at the Federal Trade Commission’s (FTC (News - Alert)) request also charged Dish Network with violating the Telemarketing Sales Rule (TSR) by assisting and supporting its authorized dealers in telemarketing Dish Network services via ‘robocalls’. These are prerecorded telemarketing messages that are played when consumers answer their phones. Dish Network, formerly known as EchoStar, is the United States’ second largest satellite TV firm.
The federal government seeks a permanent injunction against Dish Network that prohibits the satellite TV provider from violating the TSR (News - Alert) (including its DNC provisions and abandoned call restrictions), either directly or through its authorized dealers. It also wants to require Dish Network to monitor and enforce its authorized dealers’ compliance with the TSR and to prohibit Dish Network from assisting and facilitating violations. The government also seeks civil penalties for Dish’s violations.
The case could be breaking legal ground. The AP reported that according to the FTC this is the first time the agency has not been able to get an accused company to settle DNC allegations. Dish refused to settle the case, so the government filed suit. The wire service added that the FTC said Dish is the biggest violator to date, based on the number of complaints to the agency.
Dish could be, if the charges are proved, in dubious company. The AP said that since the registry began in 2003 the FTC has brought more than 40 cases against companies for DNC violations. The biggest settlement to date involved another satellite television provider: DirecTV (News - Alert) Inc., which paid a $5.3 million settlement.
Dish is denying the allegations. In a statement the firm said: “An independent audit demonstrates that DISH Network is in compliance with ‘do-not-call’ laws, has proper controls in place, and is well within the safe-harbor provisions of the law. We also believe that the FTC is equating merely doing business with an independent retailer to 'causing' or 'assisting and facilitating' violations by that retailer, which creates a strict liability standard that does not exist in the law and was not intended by Congress.
“We look forward to resolving these differences of opinion through the judicial process.”
The complaint announced against Dish Network today is being brought jointly with the Attorneys General of California, Illinois, Ohio, and North Carolina as co-plaintiffs. In addition to the TSR violations alleged by the United States, the complaint includes allegations brought solely by the state Attorneys General. They include allegations that Dish Network violated the Telephone Consumer Protection Act (TCPA) and state law – either directly or indirectly as a result of third parties acting on its behalf – by calling numbers on the Do Not Call Registry and by placing telemarketing calls that deliver prerecorded messages to live consumers.
The FTC also announced that, at its request, the Justice Department is filing complaints against two of Dish Network’s authorized dealers, accusing them of violating the TSR by calling consumers whose numbers are on the Registry. The principals of those authorized dealers are also named in those complaints. The three complaints announced today were filed against: 1) Dish Network, LLC, formerly known as EchoStar; 2) Vision Quest, LLC, and its principal Brian K. Cavett; and 3) New Edge Satellite, Inc., and its principal Derek LaVictor.
 “Since the National Do Not Call Registry was launched, it has been enormously effective at protecting millions of Americans from unwanted telemarketing calls at home,” says Eileen Harrington, Acting Director of the FTC’s Bureau of Consumer Protection. “But because a few bad actors still don’t get it, we want to make it crystal clear. If you call consumers whose numbers are on the Do Not Call Registry, you’re breaking the law. If your authorized dealers call consumers whose numbers are on the Registry, you’re breaking the law. Either way, we will protect the privacy of American consumers and we will hold you accountable.”

Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Jessica Kostek