EchoStar, SBCA Appeal 'Must-Carry'

By Greg Tarr On Mar 18 2002 - 8:00am




EchoStar and the Satellite Broadcasting and Communications Association filed petitions asking the Supreme Court to review an appeals court decision upholding satellite must-carry, but DirecTV opted not to join the effort.

The must-carry rules are unconstitutional and anti-consumer, stated SBCA president Andy Wright.

He said must-carry "clearly violates the First Amendment of the U.S. Constitution because it favors certain local broadcasters over others and it penalizes DBS providers for carrying popular stations by forcing them to carry every station without monetary compensation."

"As we have said from the outset, consumers in the marketplace should decide what programming satellite companies carry, not a federal mandate. We remain firmly confident that we will ultimately win this case on the merits of our constitutional arguments," Wright said.

When the Supreme Court ruled against cable's challenge of must-carry it did so because it concluded cable was a "bottleneck monopoly wielding market power and had anti-competitive reasons for refusing to carry popular broadcast stations as a result of its vertical integration with programmers and its competition with local broadcasters for local advertising dollars," Wright said.

"Neither of those points, which were specifically cited in the Supreme Court ruling, is applicable to the DBS operators," Wright said.

DirecTV, which has participated in satellite must-carry legal challenges in the past, reportedly has decided not to join the Supreme Court fight.

DirecTV opted out of the petition in order to focus its efforts on building its near-term business, the company said.

Meanwhile, the Federal Communi-cations Commission suspended review of the proposed merger of EchoStar and DirecTV parent Hughes Electronics because the companies failed to meet a deadline to submit requested information on EchoStar's business relationship with Vivendi Universal, among other things.

W. Kenneth Ferree, FCC cable services chief, notified the companies that he had "stopped the clock" on the 180-day merger review process until his agency receives the requested information.

The information had been requested on Feb. 4, mandating a reply by March 6. The satellite companies sought an extension to March 21, which Ferree denied.

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