Slow Start to Ergen's Local-Signup Campaign

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Reports here were mixed last week as to whether EchoStar Communications Corp. has made any progress toward striking carriage deals with local TV stations.

Although EchoStar suggested it made some headway, one large TV-station group said it couldn't get the direct-broadcast satellite provider to book a time to meet.

"I asked for an appointment and I didn't get it," said Paxson Communications Corp. chairman Lowell (Bud) Paxson, whose company owns dozens of TV stations. "There's nothing else to comment."

EchoStar chairman and CEO Charlie Ergen recently notified nearly all 1,309 commercial TV stations — and some public broadcasters — of his commitment to carry them.

In a letter, he stressed that if a broadcaster that offers "meaningful local content" inks a deal with EchoStar, it won't have to worry about losing carriage later — even if the company convinces the U.S. Supreme Court to void the federal law that requires a DBS provider to pass through all of the broadcast-TV stations in any market in which it elects to retransmit just one over-the-air signal.

Ergen sent company officials to last week's National Association of Broadcasters convention here to iron out on-the-spot carriage details.

"EchoStar has held substantive meetings with dozens of broadcast groups and individual broadcasters representing hundreds of stations at the NAB convention," said EchoStar spokesman Marc Lumpkin.

If allowed to follow through on plans to merge with DirecTV Inc. parent Hughes Electronics Corp., EchoStar has promised to carry every TV broadcaster in all 210 markets. But that promise would be void if the must-carry law is struck down, the company said in a recent Supreme Court filing attacking the mandatory carriage law.

Lumpkin did not say if EchoStar reached any deals with broadcasters last week.

"The meetings and ensuing carriage-agreement negotiations have been very positive," he said. "[Broadcasters] appreciate our commitment to carry all 210 local television markets."

Benedek Broadcasting Corp. president K. James Yager said he was to meet with EchoStar, but was wary about committing to any deal.

"Our history has not been great with EchoStar," said Yager, a member of the NAB's executive committee.

NO 'PIONEER' EDGE

Steve Wheeler, station manager of ABC affiliate WSIL in Harrisburg, Ill., said he would sit back and see what other stations do.

"I won't be the first guy to meet with [EchoStar]," he said. "I might talk to them and see what they are about. I don't see any advantage in being the pioneer in signing an agreement with EchoStar."

As an ABC affiliate, WSIL is likely to obtain carriage from EchoStar in its southern Illinois market, Wheeler added. "For a traditional network affiliate, I don't think must-carry is an issue," he said.

Tribune Co. president Dennis FitzSimons said he was not aware of EchoStar's offer.

Hearst-Argyle Television CEO David Barrett was in no rush to sign a deal with EchoStar as insurance against a court setback. "We haven't [met] yet," he said. "We have time to address that."

One NAB official said he was unaware of any station that had signed a carriage deal with the DBS company. EchoStar had planned to staff a booth on the convention floor but did not go forward with its plan, he said.

The NAB is a leading opponent of the EchoStar-DirecTV merger. Some analysts viewed Ergen's latest carriage offer as a bid to blunt the NAB's opposition.

In a speech last Monday, NAB president Edward Fritts reminded his members that EchoStar wasn't just challenging DBS must-carry in the Supreme Court while also promising to serve every market if the merger goes through. The satellite provider is also attempting to get the Supreme Court to strike down a law that prevents EchoStar from offering network affiliates from New York and Los Angeles to every home in the country, he said.

Fritts called the decades-long terrestrial exclusivity of local stations "the fundamental bedrock of our local television system."

"NAB strongly endorses carriage of all stations in all markets on satellite, and we won't stop until we've achieved that goal," Fritts said. "Given the track record of EchoStar, however, we have to believe that our best hope of achieving total carriage is through competition in satellite, and not through an EchoStar monopoly."

DBS MERGER CHATTER

The EchoStar-DirecTV merger was a hot topic last Monday at a panel discussion that included staff from the U.S. Senate and U.S. House of Representatives.

Al Mottur, an aide to Senate Commerce Committee chairman Ernest (Fritz) Hollings (D-S.C.) saw the EchoStar-DirecTV deal as a greater threat to competition than the biggest cable merger ever — the pending deal involving AT&T Broadband and Comcast Corp.

"As big as AT&T-Comcast would be, they do not have a national footprint," Mottur said. "That's what EchoStar-DirecTV presents to the marketplace, the possibility of national footprint of one provider with access to every home that wants to buy a dish."

Ken Johnson, spokesman for House Commerce Committee chairman Billy Tauzin (R-La.), said the DBS merger could represent a check to the much larger cable industry.

"There is no one in Congress who is any more a champion of free markets and competition than Billy Tauzin," said Johnson. "At the same time, we are growing very concerned and wary about the dominance of cable, not only in the delivery of programming but also in the delivery of broadband."

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