Viacom Strikes Back at EchoStar

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The heated carriage battle between EchoStar Communications Corp. and Viacom Inc. turned ugly Tuesday, as Viacom took to the offensive in a blistering rebuttal to the satellite service’s removal of Viacom-owned broadcast and cable stations from Dish Network’s 9.5 million subscribers.

Calling it "channel yanking by a distributor on an unprecedented scale," MTV Networks president Mark Rosenthal blistered EchoStar for pulling 15 Viacom-owned CBS broadcast stations reaching approximately 1.6 million subscribers, as well as several cable networks such as Nickelodeon, MTV: Music Television and Black Entertainment Television, over rights fees.

Speaking during a conference call Tuesday afternoon, Rosenthal said EchoStar balked at a "modest and reasonable" proposed Viacom cable-rate increase that would have cost "less than 10%" per year for all of its cable channels.

"The fact makes it clear that EchoStar’s decision to pull the plug on our channels shows that they care a whole lot more about lining their pockets than about what matters to their subscribers," he added.

But EchoStar CEO Charlie Ergen fired back during a Tuesday-night "Charlie Chat," saying that Viacom demanded an "exorbitant" 40% rate increase over the course of the term of the contract for the broadcast and cable services.

Ergen also said Viacom wanted the network to tear up existing deals for Viacom-owned Spike TV, Country Music Television and TV Land and extend those deals at higher rates, as well as launching additional channels, such as Nicktoons, that he didn’t feel would be the best use of bandwidth.

Nevertheless, Ergen said, the two parties are negotiating and he’s hopeful that a deal can be reached soon.

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