Court Pulls EchoStar's Distant Signals

In a decision that could have serious implications for EchoStar's satellite TV business, a federal appeals court has ordered to stop delivering the signals of distant TV stations to its subscribers.

The ruling could force EchoStar’s Dish Network to shuffle the station lineup delivered to hundreds of thousands of subscribers. Some subs may be temporarily unable to receive any broadcast stations at all.

In a harshly-worded opinion, the three-judge panel declared: "We have found no indication that EchoStar was ever interested in complying with" laws regulating how satellite TV companies deliver broadcast stations to their customers.

The case is part of a long-running copyright dispute between broadcasters and satellite companies over homes located in the fringes of TV markets. TV stations want to reach every home in their areas. But subscribers in fringe areas often prefer their satellite companies to deliver stations from, say, New York City rather than Hartford, Conn.

EchoStar is permitted to deliver so-called "distant" signals only to homes that receive no other stations over the air. But EchoStar’s method of determining which customers were eligible for the distant signals has been a bone of contention, and litigation, for years. Broadcasters complain that the company abuses the rules and violates the Satellite Home Viewer Act by regularly delivering the wrong market’s stations to its subscribers.

The four major networks and their affiliate groups sued EchoStar, and won a key decision, but EchoStar appealed.

In a statement Tuesday, EchoStar explains its position: "While consumers are free to choose to read the New York Times, San Francisco Chronicle or any other newspaper regardless of where in the United States they live, broadcasters successfully orchestrated passage of special interest legislation which prohibits consumers from watching network channels originating in other markets, except in limited circumstances."

EchoStar’s appeal didn’t get a very warm reception at the apellate court in Atlanta.

The decision notes that "EchoStar has alleged a staggering seventeen claims of error" by the district court in Miami. "Despite EchoStar’s apparent characterization of the trial as one of gross mismanagement, utter incompetence, and widespread chaos, we find the district court’s orders and opinions to be generally thoughtful, careful, and well-reasoned."

The court says that in "the best case scenario" EchoStar is providing illegal service to 26.5% of its subscribers receiving ABC distant network programming, 26.9% for CBS, 20.2% for Fox, and 28.1% for NBC.

EchoStar says that since the dispute began in 1998, it has reached settlement agreements over the years with hundreds of the approximately 800 ABC, NBC, CBS and Fox stations across the country including all ABC, NBC and CBS owned and operated stations.

"We were not able to reach settlement agreements with the Fox network or the station groups owning the remaining stations," said EchoStar in a statement. We are reaching out again to the NAB, Fox and remaining stations to try and satisfy all of their concerns without harming consumers, and considering our other available options in response to the ruling from the Court of Appeals."Fox is co-owned with EchoStar's satellite rival, DirecTV.It was unclear at press time whether EchoStar could continue to deliver distant signals to any stations, including those with which it settled.