EchoStar Denies Set-Aside Violation - Multichannel

EchoStar Denies Set-Aside Violation

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EchoStar Communications Corp. is denying that it violated Federal Communications Commission rules when it allocated a public-interest channel to a Christian programmer that had agreed in exchange to give up must-carry rights for several TV stations.

EchoStar told the FCC last Thursday that it charged Daystar Television Network the appropriate amount under FCC rules and that side deals that included giving up must-carry rights were not prohibited by the FCC in 1998, when the agency required direct-broadcast satellite carriers to make 4% of their channels available to educational programmers.

"The only limitations are that a DBS [operator] cannot `auction off' the 4% set aside by charging programmers more than 50% of the actual cost of delivering the signal. The [FCC] should therefore conclude that EchoStar was within its rights to choose Daystar programming," EchoStar said in an Oct. 16 filing.

Dominion Video Satellite Inc. -- a DBS operator that shares an EchoStar satellite to distribute Sky Angel, a Christian programming service -- has complained to the FCC that EchoStar effectively auctioned a national channel to Daystar when Daystar agreed not to seek mandatory carriage for 10 full-power TV stations it owns.

Dominion alleged that FCC rules were breached because Daystar received preferential treatment over other nonprofit programmers that didn't have valuable spectrum rights to barter.

Daystar has countered that Dominion is upset mainly because Daystar's selection by EchoStar represents competition for Christian-programming viewers.

Dominion has an exclusive contract to be EchoStar's sole provider of satellite-delivered Christian programming. Daystar has asked the FCC to rule that Dominion should not be allowed to use that contract to prevent EchoStar from fulfilling its set-aside obligations.

In its FCC comments, EchoStar said it was in "the middle of a power struggle" between Dominion and Daystar.

"The net result is that EchoStar is caught in the crossfire between two organizations that while professing as their mission the wide dissemination of the Gospel in fact have chosen courses designed solely to maximize the dissemination of their own particular programming," EchoStar said.

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