Ergen Slams Viacom, Ready to Drop CBS

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Washington -- EchoStar Communications Corp. chairman Charlie Ergen said Thursday that he is ready to drop CBS stations from his satellite system if the two parties can't reach an amicable carriage agreement by midnight Monday.

EchoStar and CBS parent Viacom Inc. are negotiating the carriage of 15 CBS stations and about 20 cable networks, but the two sides have been far apart. EchoStar has filed an antitrust suit against Viacom in Federal Court in San Francisco.

Ergen -- in remarks to a Progress and Freedom Foundation audience here that included at least one Viacom lobbyist -- accused Viacom of demanding 40% price hikes and refusing to release CBS unless EchoStar carried at least six Viacom cable networks that he doesn't want.

"I am not feeling really good about them right now," Ergen said. "In the past three years, we have given Viacom more customers than the entire cable industry and DirecTV [Inc.] combined. Why are our customers paying 15%-20% premiums? I don't understand it."

Federal law allows Viacom to seek compensation from pay TV distributors for carriage of its CBS stations, but broadcasters are required to bargain in good faith.

EchoStar's suit alleged that the tactic of tying retransmission consent of CBS stations to carriage of numerous Viacom cable networks violates antitrust law.

"We think the retransmission law that was passed in [the Satellite Home Viewer Improvement Act of 1999] is being abused," Ergen said. "With regard to Viacom, they have been the biggest abusers of that privilege."

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