Dish Network subscribers can now watch Elmo in High-Definition, in part due to a Ninth Circuit decision.

In Dish Network Corporation, et al v. FCC, et al, the appellate judges upheld a District Court ruling from Nevada, denying Dish Network, LLC an order to enjoin Section 207 of the Satellite Television Extension and Localism Act of 2010.  Section 207 required direct broadcast satellite providers that carry local stations in hi-def to adhere, too, to a timetable to carry in HD non-commercial educational stations like the Public Broadcasting Service (PBS), the home of Elmo of Sesame Street fame.

Dish Network, with 14.1 million or so subscribers, and DirectTV, with roughly 18.5 million subscribers, are the only two U.S. direct satellite operators. They beam from satellites in space signals across the country, even to rural areas that traditional broadcast may not be able to reach. Such operations never would have been possible without Congress’ creation of the Satellite Home Viewer Improvement Act of 1999, which provided an exception to copyright law by allowing satellite operators to retransmit a local broadcast station signal without first winning permission from individual copyright holders.  But that legislation also established conditions, including the “must carry” rules for other signals of broadcast TV stations in the same local market and equal treatment of all local television stations for picture quality.

Because it licenses their radio frequency space and helps to avert signal interference issues, the FCC, as their regulating agency, had set up rules for how satellite broadcasters would provide local station and educational programming in HD, giving the companies several years to comply and recognizing technical constraints to do so — including that HD devours channel bandwidth.  Then Congress last May also called for the satellite services to hurry up their HD carry of educational TV, ordering them to do so across the country by no later than December, 2011.

Facing this new deadline, Dish satisfied an exception clause in Section 207 by contracting with “at least 30 qualified non-commercial educational television stations.” This caused Dish to delay its launch of HD service in ten new television markets. “That delay, DISH argues, forces DISH subscribers to receive PBS programs in HD before commercial programs, even though they ‘prefer watching the World Cup and American Idol in vivid colors over Jim Leher and Elmo.’ ” (See Decision.)

Dish then filed suit to block Section 207. The company argued the statute is a content-based regulation of free speech that violates the First Amendment because it requires Dish to carry non-commercial ed TV, blocking it from carrying other stations in HD. Dish claimed this affected its “editorial discretion and judgment by forcing it to delay offering commercial programming in HD to certain markets.” (See Decision.)

The Ninth Circuit Court disagreed, giving Elmo and the rest of his cast and those on other PBS shows a win on satellite TV carrying them in HD. What’s less clear, however, is what kind of PBS programming will be around if Congress wields its budget ax, whacking at billions of dollars in federal aid, including for public broadcasting.