EchoStars a local laggard

Deals in place for ABC, Post-Newsweek, Fox; but 29 groups are unsigned

With next Monday's deadline looming, EchoStar Communications Corp. faced unsigned local TV carriage deals with 29 broadcast groups.

Late last week, EchoStar announced carriage agreements with ABC's 10 owned-and-operated stations and with Post-Newsweek's six stations, leaving the company with 87 stations uncovered in 28 markets.

But whether any of EchoStar's subscribers will lose their recently acquired access to local signals via satellite remains to be seen. Some broadcasters said last week they planned to grant EchoStar short extensions to complete negotiations. But others said the deadline needed to be respected. And still others said they were close to signing deals.

As part of satellite-TV reform, Congress included a provision that requires satellite-TV companies to complete local TV carriage agreements with TV stations by Monday, May 29. If the deals aren't done, the satellite-TV companies must take down any unsigned stations or risk being sued by broadcasters, with penalties of $25,000 per station per day.

Penalties notwithstanding, Congress appears surprisingly complacent about it. If EchoStar is forced to cut off signals in some markets, congressional staffers said they expect the market to work it out. "If DirecTV is able to get their negotiations done, why can't EchoStar?" asked one Hill aide.

Sources said the DBS companies were paying broadcasters 5 cents to 10 cents per subscriber in addition to other perks. Several sources said EchoStar's deals have been held up because the company started its negotiations late and because it refused to offer any cash until about six weeks ago. EchoStar rival DirecTV started negotiating its local carriage agreements last summer, while EchoStar waited until after satellite-TV reform passed Congress last November.

As part of its deal with Disney, EchoStar agreed to carry the company's 24-hour soap-opera channel, SoapNet, on its premium-programming tier in return for permission to carry Disney's ABC stations. EchoStar already carries the Disney Channel and Toon Disney.

Until last Thursday's announcement with ABC and Post-Newsweek, EchoStar's only finished deal was with Fox's 22 O & Os, which it made when it settled a lawsuit two years ago with Fox's parent company, News Corp., and bought News Corp.'s satellite assets.