EchoStar Gains Stay vs. Network Affils


A federal court in Atlanta ruled Wednesday that EchoStar Communications Corp.
is not immediately required to cut off hundreds of thousands of subscribers who
have been illegally receiving out-of-town signals of ABC, NBC, CBS and Fox.

A three-judge panel of the U.S. Court of Appeals for the 11th Circuit granted
EchoStar a stay from a lower-court ruling in June that in all likelihood would
have put an end to viewing of distant network signals by a large number of
EchoStar subscribers.

In a prepared statement, EchoStar hailed the ruling as "a major victory for
satellite-TV subscribers."

The two-page ruling was handed down by U.S. Circuit Judges Gerald Bard
Tjoflat, Stanley F. Birch Jr. and Frank M. Hull.

Under a lower-court order, EchoStar had until Aug. 11 to cut off customers
illegally receiving distant networks. In April 2002, EchoStar had 1.8 million
distant network subscribers paying $5.99 per month for the service. At trial,
EchoStar failed to demonstrate that even one of them was legal, the judge

The 11th Circuit's stay marked another twist in a long-running feud between
EchoStar and affiliates of the "Big Four" networks.

Under federal law, direct-broadcast satellite subscribers who can pick up
local network affiliates with off-air antennas are ineligible to receive distant
signals via satellite. Local affiliates, fearing a loss of viewership and ad
revenue, have fought hard to block DBS importation of distant signals.

The lower-court judge found that EchoStar had violated the law by signing up
"hundreds of thousands" of illegal customers. The judge could have barred
EchoStar from offering broadcast signals anywhere in the country -- a move with
potentially devastating consequences.

But saying that such a remedy was extreme, the judge instead issued the
injunction requiring EchoStar to cut off all illegal subscribers by Monday.

As a result of the 11th Circuit stay, EchoStar may continue to provide
distant signals to the subscriber base that the lower-court judge considered

In the stay order, the 11th Circuit said it would hear EchoStar's appeal on
an expedited basis.