It was a tough couple of weeks for the Denver-area satellite empire. EchoStar, purveyor of the Dish Network, took a hiding in the courts over carriage of broadcast signals and use of recording technology.
EchoStar's long fight to continue carrying out-of-market broadcast signals, also referred to as "distant signals," took a major blow when U.S. Supreme Court Justice Clarence Thomas refused an emergency request to stay a decision by the U.S. Appeals Court in Atlanta ordering the satellite broadcaster to stop carrying distant signals. Dish sought to have the Atlanta court ruling put on ice until it obtained a review by the full Supreme Court. Two federal courts, including the one in Atlanta, refused similar requests from EchoStar, even though the satellite operator had the support of the broadcast networks that sued it to stop.
The case has dragged on for more than eight years. EchoStar said it would continue to negotiate with individual broadcasters. (Indeed, a settlement was reached after his item was originally published. EchoStar agreed to pay $100 million to settle with ABC, NBC, CBS and Fox affiliates. The final outcomes was still pending on Monday, Reuters reported.)
Around 800,000 of EchoStar's 12.3 million Dish subscribers receive distant signals, according to several published reports. For broadcasters, the practice skews the designated market areas, a factor in ad rates. However, for Dish subscribers, there's no logic to the prohibition.
Price Coleman is a satellite subscriber who lives near Durango, Colo.
"Why must satellite subscribers get Albuquerque instead of Denver broadcast stations?" he said. "The simple answer is we're in the Albuquerque DMA. But politically, socially, economically, etc., we're Coloradans, not New Mexicans. Some find a way around it by using an address that's in the Denver DMA. It's really pretty stupid. Sat subs ought to be able to get whatever broadcast channels they want, wherever they are."
Dish is expected to have to cut distant signals any day. The outcome is considered a victory for News Corp., owner of the Fox network--one of the plaintiffs as well as the controlling shareholder of DirecTV--EchoStar's main competitor.
In yet another federal court, this one in Texas, EchoStar was found to be violating patents held by TiVo, the Alviso, Calif. company that pioneered digital video recorders. The U.S. District Court for the Eastern District of Texas on Aug. 18 upheld a previous jury verdict that EchoStar was stepping on TiVo's patents. The Texas courts awarded TiVo around $85 million in damages and ordered EchoStar to shut down the DVR capability in the estimated 3 million Dish set-tops that have that feature.
Later the same day, the Federal Circuit Court of Appeal in Washington D.C. issued a temporary injunction while court papers are reviewed.
