EchoStar Communications Corp. is basking in the latest
victory in its fight to gain access to cable programming, after winning a Federal
Communications Commission ruling against FX Networks.
In a memo released April 17, the FCC ordered FX to make its
programming available to EchoStar on nondiscriminatory terms within 45 days.
"We are very pleased that the commission ruled in our
favor," said David Moskowitz, senior vice president and general counsel for EchoStar.
"We are disappointed, however, that we actually had to go to the commission on what
seemed to us to be such a clear-cut issue."
A spokeswoman for FX said the network would not appeal the
FCC's decision, adding, "We are prepared to comply with the opinion."
Some industry observers, who asked not to be named,
suggested that FX is privately pleased with the FCC's opinion because it allows the
network to expand its distribution base to the fast-growing direct-broadcast satellite
In its complaint, EchoStar alleged that FX refused to
provide programming to EchoStar's Dish Network DBS service because FX had signed
exclusive contracts with cable operators across the country.
EchoStar said that exclusivity violated the FCC's
program-access rules, which were designed to help stimulate competition in the
Today, those rules only apply to programmers that are
vertically integrated with cable operators, and only to programming delivered via
FX had countered that because its exclusive contracts were
signed with cable operators before FX became a vertically integrated programming provider
in September 1996, those contracts should be honored.
FX now has ties to Tele-Communications Inc. through its
ownership by Fox-Liberty, a joint venture between News Corp.'s Fox Inc. and
TCI's Liberty Media Group. The FCC rejected that argument.
Mickey Alpert, president of DBS consultancy Alpert &
Associates, said there's a movement in Washington, D.C., to prevent discrimination
against DBS and other competitors to cable.
There's even a move in Congress to extend
program-access rules to non-vertically integrated programmers. "I don't think
that they'll go that far," Alpert said, "but I do think that the
program-access rules will be strengthened."
Moskowitz said the need to file program-access complaints
such as the one against FX highlights the company's concern over the proposed
PrimeStar Inc.-News Corp. transaction.
"The potential for abuse is significantly
exacerbated" when there is such a heavy concentration of programmers backing one DBS
company, Moskowitz added.
PrimeStar does not currently carry FX, said Denny
Wilkinson, PrimeStar's senior vice president of marketing and programming. Wilkinson
added that although FX is not something that PrimeStar customers have asked for in great
numbers, it is a service that has tested well.
Wilkinson said that given the FCC's ruling, PrimeStar
would consider adding FX, but he hasn't spoken to the network yet.
A spokeswoman for DirecTv Inc. said the company is
"talking to everybody" in terms of new channels, adding that nothing is ever
announced until it's a done deal. "We've had some inquiries and some
interest from some subscribers," she added.
Earlier this month, Ameritech New Media and its Americast
partners filed their own program-access complaint against FX. In a statement, Ameritech
Corp.'s cable arm said hundreds of its customers have requested the channel.