News

FCC Voids EchoStar's Two-Dish Plan

4/04/2002 6:47 AM Eastern

EchoStar Communications Corp. broke the law by requiring subscribers to
obtain second dishes to receive some but not all local TV signals in a market,
the Federal Communications Commission ruled Thursday.

EchoStar adopted the two-dish plan in January to comply with a federal law
requiring direct-broadcast satellite carriers to carry all local TV stations in
a served market. The company said the plan was an interim step until a new
satellite boosting channel capacity was operational.

Even though EchoStar made the second dish available to consumers
free-of-charge, the FCC's Media Bureau ruled that the two-dish plan violated
several anti-discrimination provisions of the Satellite Home Viewer Improvement
Act of 1999.

'Today we took an important and necessary action to ensure that all broadcast
stations are carried in a nondiscriminatory manner. EchoStar's two-dish plan was
implemented in such a way as to make some stations unavailable to subscribers as
a practical matter,' Media Bureau chief Ken Ferree said.

In a press release, Ferree said EchoStar had to comply with the law
immediately and file a progress report in 30 days.

EchoStar is the nation's second-largest DBS carrier, with 7 million
subscribers. The company is attempting to merge with Hughes Electronics Corp.,
parent of No. 1 DBS carrier DirecTV Inc., which has 10 million subscribers.

An EchoStar spokesman was not immediately available to comment.

The FCC gave EchoStar seven compliance options. One called for moving local
stations to its primary satellite so that only one dish was needed, and another
called for moving all local TV signals to so-called wing-slot satellites so that
all subscribers would need second dishes to view all local TV stations in a
market.

Not long after EchoStar unveiled the plan, the National Association of
Broadcasters and the Association of Local Television Stations (which no longer
exists) filed an emergency petition attempting to block EchoStar's plan.

'We're gratified that the FCC has recognized that EchoStar's two-dish scheme
was an anti-consumer ploy to evade FCC rules and regulations. Local television
viewers will be the beneficiaries of today's action,' NAB president Edward
Fritts said.

EchoStar may appeal Ferree's ruling to the four FCC commissioners, but they
rarely reverse bureau decisions. The company also has the option at some point
to appeal in federal court.

In January, EchoStar offered local TV signals in 36 markets. In 30,
subscribers needed second dishes to view all of their local TV signals. The NAB
said the plan relegated some stations, primarily independent stations, to an
'inaccessible technological ghetto.'

DirecTV was not involved in the dispute because it made all local TV signals
in 41 markets available through a single dish.

EchoStar said it could not follow in DirecTV's path because Loral Space &
Communications Ltd. and Lockheed Martin Corp. failed to deliver new satellites
last year that would have allowed reception of all local TV signals with one
dish.

EchoStar said both Loral and Lockheed Martin notified the FCC of the delays.
An FCC source has confirmed that notification.

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