Irked Echo unplugs subs

Satcaster shuts off signals to protest bill

WASHINGTON — Thousands of satellite subscribers lost network programming over the weekend, as EchoStar chairman Charlie Ergen called Congress’ bluff and began shutting off signals to subs while urging them to register complaints over a pending reform bill with their elected representatives.

Ergen’s decision to use his subscriber base to play politics comes as a pending satellite bill continues to be bogged down in the Senate. Finance Committee chairman Phil Gramm (R-Texas) is blocking the bill, which was expected to have been signed into law by now. Gramm claims a provision of the bill must be approved by his committee.

Last week the House chalked up a 411-8 vote in favor of a bill allowing satcasters to add local broadcast stations to their channel lineup. EchoStar maintains that the subscribers would lose their signals under the pending satellite reform bill, and by shutting off those signals it was just beginning a process that would soon be required by law.

Ergen is taking advantage of the delay to mobilize his growing subscriber base.

After lobbying for the bill for more than three years, Ergen was upset with the final product, which leans heavily toward policy positions taken by the broadcasting industry. For instance, the bill gives Ergen only six months to sign deals with the broadcasting industry that will allow him to retransmit their signals to subscribers. And after two years, he will have to carry every broadcast channel in markets where he offers local service — a provision he says that will limit the number of markets he’ll be able to serve.

Rough transition

In addition, the bill requires Ergen to cut off network feeds to all homes in the markets where he provides local signals on the very day that he launches his local service. The customers must be cut off whether or not they sign up for the local channels. Ergen believes that will create an extremely rough transition for a large percentage of his 3 million subscribers who get their network programming from stations that are sometimes thousands of miles away.

And Ergen is not the only one trying to gain some ground this week with respect to the satcasting reform bill. Online companies such as AOL are very upset to discover language in the bill that would prevent them from offering broadcast TV programming via the Internet. The bill specifically states that the license that allows satellite and cable companies to retransmit local TV stations does not apply to Internet Service Providers.

Content providers chime in

Content providers such as film studios, broadcasters and sports leagues are fighting to keep the language in. The copyright holders worry that the Internet could undermine their ability to make regional copyright agreements. After all, once someone is on the Internet, it doesn’t matter if he is watching programming that originates in Paris, Texas, or Paris, France.

Even before the House approved the bill, Gramm vowed to block the legislation over a provision that would give a loan guarantee to satellite companies that offer local channels to rural areas and small markets. Gramm insists that his committee has to review all loan guarantees and says he will stand in the way of the popular legislation until the provision is removed.

Deadline looms

Whether or not congressional switchboards are flooded with calls from angry EchoStar subscribers, Capitol Hill needs to make a decision in the next few days on the satellite legislation. Congress is preparing to wrap up their work and head home for the year. If no action is taken, Congress will fail in jump-starting competition to cable. What’s more, the license that allows satcasters to retransmit any network feeds to their subscribers will not have been renewed, meaning that millions of subs will lose all of their satellite-delivered network programming.

In these closing days, tempers are running high and Democrats are beginning to see satcasting reform as a potential campaign issue. If Congress fails to take action on the bill, Democrats may point to it as an example of Republican legislative incompetence.