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NAB, EchoStar butting heads

Jan 7, 2002  •  Post A Comment

The satellite must-carry law has only been in effect since New Year’s Day, but already there’s controversy.
The National Association of Broadcasters filed a complaint with the Federal Communications Commission on Friday accusing EchoStar Communications of violating the spirit and possibly the letter of the law.
Under the requirements, satellite providers must carry all local stations-or none of them-in a market beginning Jan. 1.
EchoStar is making local feeds available in 36 markets, but customers need a second dish from the company to see many of them, which the NAB says could dissuade subscribers from getting the signals.
And the second dish generally receives less-popular stations, making it easy for consumers to bypass them. EchoStar has already added popular local TV stations, such as network affiliates, to the pizza-shaped antennas its customers already have.
By contrast, DirecTV customers need only one dish for all channels, including local stations.
The NAB worries that EchoStar, headed by the legendary Charlie Ergen, a CEO with a reputation as a savvy, shrewd and frugal businessman, is quietly trying to carve out more channel capacity for cable fare by making it tough for customers to access local signals.
EchoStar insists that is not the case.
“Whether they watch it or not, [the programming’s up],” a spokeswoman said. “We are complying with the must-carry rule.”
EchoStar says the launch of a new satellite necessitates the second dish-the equipment and installation are free, and the company is promoting the stations through mailings and ads.
Also last week, EchoStar and The Walt Disney Co. locked horns in a separate dispute over the availability of ABC Family on EchoStar’s 6 million-plus-subscriber DISH Network.
Subscribers can still view ABC Family, the newest member of Walt Disney’s cable lineup, but only due to a temporary restraining order from a Los Angeles federal court. Both sides are expected back in court when the order expires Jan. 10.
EchoStar had planned to yank ABC Family at the end of 2001, citing an ownership-change provision in its affiliate agreement with Fox Family Worldwide, the network’s previous corporate parent.
Meanwhile, EchoStar has dropped Disney/ABC’s ESPN Classic network, whose affiliation agreement expired Dec. 31.
The DBS company said Disney has imposed excessive rate increases, forcing it to make difficult programming decisions to keep costs down for consumers. EchoStar maintains its moves were prompted by the must-carry rules, which squeeze its channel capacity, a claim Disney disputes.
And Disney noted that EchoStar failed to raise the ownership-change argument when Fox acquired International Family Entertainment.
Disney is expected to ask federal regulators to oppose EchoStar’s proposed acquisition of DirecTV. EchoStar said Disney is using the specter of opposing the deal as a bargaining chip to force its hand in programming negotiations.