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Don't Sink Our Subs, EchoStar Tells Court

EchoStar has told a Florida district court that it should not have to pull the distant network signals of 800,000 subscribers because circumstance have changed dramatically since a court ordered it to, and consumers would be unduly and unfairly hurt by the move. Also, they say, competitor DirectTV would directly benefit from the move.

The Florida court had given the company until Sept. 12 to explain why the court should not immediately impose a permanent injunction against delivery of those signals as ordered by the 11th Circuit U.S. Court of Appeals.

Fox has argued that even though Echostar recently settled complaints over distant-signal delivery with 95% of the affected stations, the injunction should still apply.

EchoStar says that that Aug. 25, $100 million, settlement--with all but Fox affiliates--is a "substantial" change in circumstance since the injunction was ordered. It also says that in light of the settlement, a permanent injunction would be "unjust, particularly to consumers."

It would also vitiate the 100 million settlement," EchoStar pointed out.

Fox, which did not settle with Echostar, on Aug. 31 asked the court to issue the injunction.

The networks and station affiliate associations sued EchoStar back in 1998 for delivering distant networkTV signals to ineligible households.

While the $100 million covered 95% of the complaining stations, which included the affiliate associations of ABC, CBS, NBC, and even Fox, the Fox-owned stations did not settle, and Fox Broadcasting argues that the payout does not change the federal appeals court directive based on its finding that EchoStar repeatedly violated the act. Fox is owned by News Corp., which controls competing DBS service DirecTV.

Echostar Wednesday argued that Fox's refusal to join the $100 million settlement was so that DireTV could then grab the customers whose distant signals EchoStar was forced to yank.

Fox argued in its court filing Aug. 31 that the injunction was based on the Eleventh Circuit's finding of a "willful and repeated pattern of delivering copyrighted programs to ineligible households," and that "even the parties to the litigation themselves cannot alter this Court's obligation to comply with the injunction mandate."

Echostar counters that the changed circumstance empowers the Florida court not to impose the injunction.

Fox points to a harshly-worded opinion of the three-judge panel of the Eleventh Circuit back in May, in which it 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.

According to law, EchoStar--and DirecTV--are permitted to deliver so-called "distant" network signals only to homes that cannot receive a sufficiently clear signal from their local affiliate of that network. 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 complained that EchoStar abuses the rules and violates the Satellite Home Viewer Act by regularly delivering out of market stations in competition to local stations in the market that carry the same network programming. The Eleventh Circuit court agreed.