News

Ergen Fights Broadcasters on Must-Carry

5/03/1998 8:00 PM Eastern

Washington -- EchoStar Communications Corp. is fighting
back in response to local broadcasters' attempts to guarantee full-carriage rights on
the direct-broadcast satellite carrier's local-TV service to home-dish owners.

EchoStar chairman and CEO Charlie Ergen said in letters
last week to Capitol Hill policymakers that immediate must-carry obligations would imperil
the company's plan to provide some local TV service in 20 markets.

"Subjecting EchoStar to must-carry today will result
in abandonment by EchoStar of its local plans," Ergen said in a five-page letter to
Senate Commerce Committee chairman John McCain (R-Ariz.) and many other House and Senate
lawmakers.

Two weeks ago, the Association of Local Television Stations
(ALTV), comprised of about 250 independent TV stations, urged Congress to impose a
"carry-one, carry-all" policy on EchoStar, saying that many of EchoStar's
claims in opposition to full must-carry were specious and self-serving.

EchoStar is seeking legislation allowing it to provide
local signals throughout a local market. Pending House and Senate bills would require
EchoStar to carry every local TV station in a market if it elects to carry even one.

Ergen has apparently won the support of McCain, who is
close to introducing a bill that would, among other things, authorize DBS companies to
package local channels with national satellite programming in the same manner that cable
operators do.

"They will have a compulsory license to offer
local-into-local without a must-carry requirement," a McCain aide said.

McCain's bill would not impose must-carry immediately.
It would require the Federal Communications Commission to draft must-carry rules for DBS
within a year, although the bill would not mandate that the FCC say when its must-carry
rules must take effect.

The FCC rules are to be crafted to provide for DBS
provision of local signals via satellite or terrestrially, including separate services
proposed by Capitol Broadcasting Co. Inc. and Northpoint Technology L.P.

McCain would also require DBS companies to compensate TV
stations that they fail to carry if the stations can demonstrate more than a minimal loss
of advertising revenue.

Finally, McCain would set DBS-copyright fees for carriage
of superstations and distant-network signals at about the rate paid by large cable
operators: 3 cents per subscriber, per month for a network and 10 cents for a
superstation.

The McCain aide said the senator expects opposition from
broadcasters and cable operators, both of which favor immediate must-carry.

"Is it perfect? No. Is it fair? We would say
yes," the aide said.

Cable is "insisting on regulatory parity, and that, to
us, is just not logical," the McCain aide said.

Ergen, in a point-by-point rebuttal to ALTV, said
EchoStar's capacity limitations were real, adding that local stations were
exaggerating the financial damages that they would suffer if they were excluded.

March