Dish Seeks Out Leverage
Asks the FCC to Declare Big Ten a Regional Sports Net
By Linda Moss -- Multichannel News, 7/29/2007 8:00:00 PM
Once again, a distributor has gone to the Federal Communications Commission seeking arbitration of a dispute with a News Corp.-affiliated sports service.
EchoStar Communications is asking the FCC to declare the Big Ten Network a regional sports network, not a national channel. That would allow the satellite provider to seek arbitration so it can secure carriage of the startup network “on reasonable terms.”
EchoStar, parent of Dish Network, filed a 19-page petition with the FCC July 20 seeking expedited treatment regarding the Big Ten Network, a joint venture that launches next month. The sports network is 51% owned by the Big Ten Conference and 49% owned by Fox Cable Networks, a unit of News Corp.
Under terms of the so-called 2004 News Corp.-Hughes order, which was meant to ensure that video providers retained access to News Corp. programming after Rupert Murdoch’s company bought a stake in satellite provider DirecTV, distributors can submit disputes with News Corp.’s regional sports networks to arbitration.
EchoStar is considering such arbitration so it can secure a deal with the Big Ten Network for Dish Network. That is why it wants the FCC to declare the service a regional sports channel.
The Big Ten Network last week objected to EchoStar’s “brazen” move, saying it’s a bid to gain leverage in contract talks.
There are already several cases involving disagreements between cable operators and Fox Cable regional sports networks that are in arbitration based on the News Corp.-Hughes order.
In April, an arbitrator ruled that a contract dispute between Massillon Cable TV and FSN Ohio should proceed to arbitration. An Aug. 9 arbitration hearing has been set in Washington, according to Massillon Cable’s attorney, Mark Palchick.
Fox Cable doesn’t believe its dispute with Massillon Cable should go to arbitration because that would set a bad precedent, according to senior vice president of communications Tom Tyrer. So the programmer has opted not to participate in the hearing, to not forfeit its right to appeal to the FCC.
Once the arbitrator issues her final award, Fox Cable can ask the FCC for a review, Tyrer said.
There is also an arbitration hearing set for late September on how much members of the National Cable Television Cooperative, which made several pleas to the FCC, will have to pay to carry seven Fox Sports Net services.
In its case, EchoStar claims that the Big Ten Network wants nationwide carriage on its basic tier and is trying to position itself as a national network, not a regional one.
If that is allowed, EchoStar said, the Big Ten can “evade” the arbitration provisions of the News Corp.-Hughes order, which only apply to regional sports networks.
And last Thursday, EchoStar, in a letter to the FCC, recommended that as a condition of Liberty Media acquiring News Corp.’s stake in DirecTV, the arbitration provision be expanded to cover all News Corp and Liberty-owned networks.
The Big Ten Network last week maintained that it is a national service.
“The impact and influence of Big Ten institutions upon the national athletic and academic arena is considerable, and EchoStar states that the Big Ten Network is highly valued by its consumers,” the network said in a statement. “We would agree, which is exactly why empowering the public with widespread access to these institutions remains our goal.”
EchoStar didn’t specify what license fees the Big Ten Network is seeking, other than to say that “the high price” the programmer was requesting was “consistent” with prices for other regional sports services.
But the Big Ten Network is reportedly seeking monthly, per-subscriber license fees of $1.10 in Big Ten markets, and 10 cents in markets outside the Big Ten.
The Big Ten Conference is a National Collegiate Athletic Association Division I conference that is made up of 11 schools in seven Midwestern states and Pennsylvania.
So far, the startup has only landed carriage deals with DirecTV, which News Corp. still owns a stake in, Buckeye Cablevision and some smaller cable operators.
The question of what is a regional sports network versus a national network has come up before at the FCC.
For example, Comcast is asking the FCC to rule that The America Channel is a national network, not a regional sports network entitled under the agency’s Adelphia Communications merger conditions to obtain carriage via arbitration.
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