Skip to main content

EchoStar Drops Program-Access Complaint Against Rainbow

EchoStar Communications Corp. said last Monday it has asked
the Federal Communications Commission to drop a program-access complaint that EchoStar
filed against Rainbow Media in October 1997.

The direct-broadcast satellite company had accused Rainbow,
a subsidiary of Cablevision Systems Corp. and NBC, of failing to offer its programming at
nondiscriminatory prices.

The complaint was dropped when the two companies reached an
agreement for EchoStar to carry five of Rainbow's cable channels, as well as six
regional sports channels. Neither EchoStar nor Rainbow would disclose terms of the
negotiations, citing a confidentiality agreement.

The accord with Rainbow does not mean EchoStar plans to
ease up on attempts to change program-access rules or to have them more strictly enforced.

EchoStar has pending complaints with the FCC against Fox
Sports Direct and FX, both partnerships between News Corp. and Liberty Media Group.

EchoStar's outside attorney Pantelis Michalopoulos, a
partner with the Washington-based law firm Steptoe and Johnson, said, "We hope and
believe we will be vindicated in these two proceedings." He added that, while
it's always possible EchoStar will be able to reach an agreement with Fox, too,
"I don't have any reason to believe it will or won't be settled without the
help of the Commission."

Michalopoulos said that the FCC has the power to prohibit
evasion of current program-access rules and to impose damages on companies that do evade
those rules. He added that EchoStar is asking the FCC to grant more liberal discovery to
video providers like EchoStar who want to know how much programmers are charging cable
operators for the same programming.

EchoStar began negotiating with Rainbow in December 1994,
according to the FCC complaint filed last October. Its Dish Network DBS service was
launched in 1996. Michalopoulos would not speculate on how much business EchoStar may have
lost to date by not offering the Rainbow regional sports channels to potential
subscribers. "It's important that this is behind us now," he said.

Mickey Alpert, president of Washington-based Alpert &
Associates, predicted that the deal with Rainbow could signal the beginning of a trend
leading to more program-access settlements between cable programmers and DBS operators.
"I don't think the cable industry wants Congress resolving these issues for
them," he said.

A spokesperson for Rainbow denied any suggestion that
Rainbow settled with EchoStar because of all the recent pressures from Washington facing
cable companies over program-access issues.

"Rainbow has always been confident that we would reach
an amicable agreement with EchoStar regarding the various business issues before us,"
the company said in a statement. "We expect EchoStar will continue to be an important
customer of Rainbow's for many years to come."

Starting April 1, EchoStar adds the following Rainbow
programming: American Movie Classics, Romance Classics, Bravo, MuchMusic and SportsChannel
regional sports.