EchoStar Communications asked the Federal Communications Commission to declare Big Ten Network a regional sports network, which would allow the direct-broadcast satellite provider to seek arbitration so that it can secure carriage of the service “on reasonable terms.”
EchoStar, parent of Dish Network, filed a 19-page petition with the FCC Friday seeking expedited treatment regarding Big Ten Network, a joint venture that is 51%-owned by the Big Ten Conference and 49%-owned by Fox Cable, a unit of News Corp.
"The impact and influence of Big Ten institutions upon the national athletic and academic arena is considerable, and EchoStar states that the Big Ten Network is highly valued by its consumers," Fox Cable spokesman Tom Tyrer said in a prepared statement.
"We would agree, which is exactly why empowering the public with widespread access to these institutions remains our goal," he added. "We also agree with EchoStar’s premise supporting the compelling nature and value that Big Ten Network provides to all satellite and cable distributors, but we must conclude that EchoStar’s petition is a brazen attempt to increase its negotiating leverage over the Big Ten Network and the institutions it represents. The News Corp.-Hughes order has never placed any of the requirements EchoStar alleges on any of News Corp.’s national television networks and, so, is equally inapplicable here. We look forward to continuing constructive and, ultimately, productive discussions with EchoStar in support of Big Ten Network."
EchoStar wants the FCC to declare the network, which launches next month, an RSN under the terms of the so-called 2004 News Corp.-Hughes order. That order set forth a number of conditions that News Corp. had to adhere in order to gain approval to acquire a stake in DirecTV.
One of those conditions was that a distributor could submit disputes with News Corp. over the terms and conditions of carrying one of its RSNs to commercial arbitration.
EchoStar claimed that after three months of negotiations, it has been unable to strike a carriage deal with Big Ten Network “due to its insistence on unreasonable terms, including rates that are far above market, and its demand for nationwide carriage on EchoStar’s basic tier.”
The No. 2 direct-broadcast satellite provider claimed that Big Ten Network is trying to position itself as a national network, not an RSN, so that it can “evade the RSN classification so that it will not be subject to the arbitration provisions” of the News Corp.-Hughes order, which only applies to RSNs.
“Although the Big Ten Network has held itself out as a national network, its programming, pricing structure and other aspects of its business model are consistent with an RSN, not with a national network,” EchoStar said in its filing.
“In particular, the pricing and packaging structure proposed by the Big Ten Network is comparable to that of a traditional RSN and bears little relation to the greatly reduced pricing structure of existing national college-sports-based networks, e.g. CSTV and ESPNU,” the filing said.
EchoStar didn’t specify what license fees Big Ten Network was seeking, other than to say that “the high price” the programmer was requesting was “consistent” with prices for other regional sports services.
But Big Ten Network is reportedly seeking monthly, per-subscriber license fees of $1.10 in Big Ten markets and 10 cents in markets outside of the Big Ten. The Big Ten Conference is a NCAA Division I conference made up of 11 school in eight Midwestern states.
So far, the startup has only landed carriage deals with DirecTV, which News Corp. still owns a stake in, Buckeye CableSystem and some smaller cable operators.
EchoStar said it “has considered” invoking its arbitration rights under the News Corp.-Hughes order, and it reserves the right to do so. It added that it filed its petition so that the FCC “can resolve any potential ambiguity, making it clear that the Big Ten Network is an RSN.”
In its filing, EchoStar said, “It is precisely because of its unreasonable pricing structure that no major unaffiliated distributor has agreed to carry the Big 10 Network on its proposed terms. DirecTV, as a sister company within News Corp.’s broad media portfolio, has an obvious interest in granting the Big Ten Network a favorable carriage deal.”
The question of what is an RSN versus a national network has come up before at the FCC. For example, Comcast is asking the agency to rule that The America Channel is a national network, not an RSN entitled under the agency’s Adelphia Communications merger conditions to obtain carriage via commercial arbitration.
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