EchoStar Rejects Must-Carry Requests

Author:
Publish date:
Updated on

EchoStar Communications Corp. has rejected dozens of requests from local TV
stations seeking mandatory satellite carriage in a dispute that might have to be
resolved by the Federal Communications Commission, sources said Monday.

Under a 1999 law, EchoStar is eventually required to carry all requesting
local TV stations in markets where the 6 million-subscriber direct-broadcast
satellite firm has opted to carry even one local TV station.

EchoStar is currently providing local TV signals -- mostly the affiliates of
ABC, CBS, NBC and Fox -- in 36 major markets. The full must-carry mandate kicks
in Jan. 1, requiring EchoStar to add dozens of local stations to its channel
lineups under the Satellite Home Viewer Improvement Act.

Eligible TV stations not currently carried by EchoStar had until July 1 to
make an election between must-carry and retransmission consent. However,
EchoStar sent letters last week -- reportedly to about 270 stations -- telling
those that selected must-carry their requests had been denied.

The basis for EchoStar's rejection was apparently the stations' 'failure to
prove [its] signal meets [the] legal standard of quality necessary for mandatory
carriage,' according to
people who had seen EchoStar's rejection letter,
which took the form of an itemized checklist.

EchoStar is evidently of the view that the TV stations have to provide
testing data showing that they can deliver a good-quality signal to EchoStar's
signal-receive facility in a designated market area.

Cable operators are required under FCC rules to test broadcast signals before
rejecting must-carry requests. Although the FCC said it wanted the cable and DBS
rules to work harmoniously, EchoStar apparently maintained that DBS carriers are
not required to perform tests before rejecting must-carry elections.

EchoStar also evidently took the position that when a must-carry dispute
arises over signal strength, the legal burden and economic cost shift to the
local TV station for a demonstration -- possibly through testing or through
evidence that testing would clearly prove the delivery of a good-quality signal
-- that a valid must-carry election had been made.

National Association of Broadcasters spokesman Dennis Wharton said the
TV-station trade group was aware of EchoStar's widespread rejection letters and
asserted that the company's grounds were baseless.

'This is yet another EchoStar stunt to circumvent their obligations under
SHVIA and FCC regulations,' Wharton said.

EchoStar spokesman Marc Lumpkin acknowledged that the company had rejected
must-carry elections but declined to state the number.

'Yes, we did have to reject some requests. They were entirely based on their
poor signal quality,' Lumpkin said. 'As the rules state, they have to have a
good-quality signal, and some did not.'

A spokesman for DirecTV Inc., the No. 1 DBS carrier, with 10 million
subscribers, said the company received hundreds of carriage requests -- either
must-carry or retransmission consent -- and numerous rejection letters were
returned.

'We have told them that because they have a poor-quality signal, we have
rejected their request and told them to improve the quality of their signal,'
DirecTV spokesman Bob Marsocci said.

Without providing specifics, Marsocci said DirecTV accepted a number of
must-carry requests and rejected others from TV stations that erroneously
believed DirecTV was providing local TV signals in their markets.

No formal complaints have been filed with the FCC, but both EchoStar and
local TV stations have contacted the agency about the dispute.

'The EchoStar people told us what they were going to do. Broadcasters called
up and said, `How is this going to work?'' said William Johnson, deputy chief of
the FCC's Cable Services Bureau.

Johnson added that the FCC has a petition for reconsideration pending in the
DBS must-carry proceeding that may provide the agency an avenue for settling the
dispute in the event no one files a complaint.

Johnson said the FCC didn't indicate to EchoStar that the agency supported
its position on rejecting must-carry elections.

'We certainly did not say this was the right way to proceed,' he added.

Lumpkin called the rejections an 'initial' decision that the company would
'revisit' at a later time.

'We are working with [the TV stations] to help them improve their signals,
and we will be meeting with them in the near future,' he
added.

Related