COURT RULES ECHOSTAR CAN'T DROP ABC FAMILY CHANNEL YET
Disney received temporary restraining order from U.S. Dist. Court, L.A., late Mon. that prevented EchoStar from dropping ABC Family Network while court case was pending (CD Jan 2 p2). Court will review Disney complaint Jan. 10. Decision came just hours before ABC Family was scheduled to be dropped from DISH network. Dispute highlights growing tensions between channel operators such as Disney and distributors such as EchoStar over programming fees that distributors pay, Disney Pres. Robert Iger said. In ruling, Judge Gary Feess said “the balance of hardships weighs heavily” in Disney’s “favor because of the nature of the harm ABC Family is likely to face” if EchoStar ended distribution. ABC has 84 million subscribers, including 6.4 million on EchoStar DISH network.
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EchoStar remains “firm in its belief that it has right to discontinue broadcasting ABC Family,” spokeswoman said. Iger said EchoStar “is well aware of steps we're taking to improve the quality of the programming. It could have easily been patient to give us the chance to improve the ratings, which we know we'll do. They have no trouble carrying pornography, but they pull a service called the Family Channel… I think they wanted to send us a signal or teach us a lesson.” Iger said he was “heartened by this victory,” but “this is not a permanent fix. We remain concerned about EchoStar’s willingness to exercise its power at the expense of fair competition and consumer choice as evidenced by the strong possibility that EchoStar will discontinue ESPN Classic.”
Iger stopped short of saying Disney would oppose EchoStar purchase of DirecTV, as some industry officials have predicted. Disney waged similar battle during AOL talks to acquire Time Warner. During that dispute Time Warner pulled ABC TV network from 3.5 million homes when negotiations for retransmission rights soured. Current court battle “is causing us to take a long hard look at the position we will take” on merger, Iger said: “They are 2 separate issues, but you have to take heed when a distributor acts in a way we believe is somewhat of a monopolistic manner.”
Televangelist Pat Robertson criticized EchoStar decision to drop Family Channel in Mon. letter to EchoStar CEO Charles Ergen. Robertson said decision could hurt efforts by EchoStar to gain regulatory approval for proposed acquisition of DirecTV: “I cannot believe that someone of your integrity and values would deny your subscribers in the rural counties of America quality family programs while at the same time providing them with 5 channels of pornographic material. I know how important the merger with DirecTV is to you. Is beating up on a channel that features religious programs worth the potential loss of the deal of your lifetime?”
EchoStar said it was “trying to protect customers from Disney”, which it called “giant media conglomerate that has imposed rate increases well beyond the rate of inflation.” ESPN raised rates 20% each year from 1998 to 2001, EchoStar said: “Continuing to carry costly services like ABC Family and ESPN Classic, with their limited viewerships, will only result in many more unhappy customers who will later face unjustifiably high TV bills which they can’t afford to pay… Only Disney has applied such heavy-handed tactics of trading political support [for Hughes-EchoStar merger] for rate increases.” EchoStar Pres. Charles Ergen said company didn’t want Disney support of deal if it had to impose rate increases on customers: “Our sole goal is to get fair pricing.” He said EchoStar still was interested in carrying other Disney channels. Ergen said final decision on ABC Family wouldn’t be made until after court ruling on Disney suit.