A half-dozen TV lobbyists trekked from their Washington offices to Capitol Hill recently to broker a deal with congressional and Federal Communications Commission staff. Topic A: renewing satellite companies' right to carry broadcast channels.
EchoStar came out the loser.
The negotiations focused on a controversial side issue: outlawing EchoStar's practice of making subscribers in many markets install two dishes to receive all local channels. Broadcasters hate it because most customers settle for the big network affiliates and whatever comes with the first dish. They rarely install the second. That puts a big dent in the potential audience for affiliates of smaller networks, as well as for Spanish-language and religious broadcasters.
EchoStar insists that millions of customers in roughly 40 markets would lose access to local channels if the two-dish policy is banned. But during the April 16 talks, an engineer from the NAB submitted detailed reports debunking such claims. Then Susan Eid, lobbyist for DBS provider DirecTV, shocked EchoStar General Counsel David Moskowitz by conceding that broadcasters were right. Satellite providers can beam local channels to the same dish without bumping off pay-TV networks, she said.
When confronted, Moskowitz admitted that EchoStar could fit all local channels on one dish—after a costly shuffling of channels across its satellite fleet. EchoStar spokesman Steve Caulk says the company did not mislead Congress on the two-dish dispute, but says a move to one dish would cause significant disruption to subscribers.
Such an about-face is typical of EchoStar and its chairman, Charlie Ergen. Five years ago, Ergen argued that it was technologically impossible to offer every local channel in a market. Yet since 1999, when Congress required satellite companies to carry every TV station in a market or none at all, Ergen introduced local service in 119 markets.
The House Telecommunications Subcommittee just handed EchoStar a resounding defeat, approving legislation that gives the DBS provider one year to put all local TV channels on one dish.
What's more, it ignored Ergen's request on another issue: letting satellite carriers import digital programming of broadcast networks from large markets into smaller ones. Broadcasters say his request is a ploy to drop carriage of local stations.