LAS VEGAS -- EchoStar said it would raise monthly subscription prices 3% (about $1) starting in March on both America’s Top 50 basic service ($22.99) and premium offerings that range up to $72.99 for America’s Everything package. Under new federal must-carry law, EchoStar has increased number of local channels it carries to 250 in 36 markets. Channels have been added to satellites at 61.5 degrees W and 148 degrees W pending launch of spot beam birds later this year. Spot beam satellites are to be colocated at 110 degrees W. EchoStar Chmn. Charles Ergen said rate increase would have been twice as high if company hadn’t dropped ESPN Classic Jan. 1. He said Disney demanded 15% increase in licensing fee for sports network. EchoStar said Disney also sought raises for ABC Family in exchange for DBS merger support, but Ergen said company chose “not to pay hush money.” Disney denies charges. EchoStar also announced it had signed programming deal with Fox Sports regional channels.

Flashes of temper heated already too-hot conference room as Satellite Bcstg. & Communications Assn. (SBCA)-sponsored panel at CES in Las Vegas brought together CEOs of 3 largest DBS companies. EchoStar Chmn.-CEO Charles Ergen and DirecTV Chmn.- CEO Eddy Hartenstein were upbeat about former’s proposed acquisition of latter frequently used Wall St.-friendly terms such as “synergy.” “In terms of simple economics, the merger will double capacity and have a tremendous effect on cost savings,” said Ergen, who expected “more level playing field in programming.” Pegasus Chmn. Mark Pagon and National Rural Telecom Co-op Pres. Robert Phillips were less exuberant. Pagon said he wasn’t necessarily opposed to EchoStar-DirecTV deal but wondered “whether it was a good thing for the industry and consumers. If you look at the record of the past decade, specifically the record of innovation in DBS, large resources are not necessary.” Phillips was less diplomatic: “The merger has problems and we can’t support it.” He said it might violate “laws that protect consumers.” With merger, 15-20 million homes that have no access to cable “now will have one choice for multichannel TV.” Companies have “as much as admitted this” by proposing “national pricing plan,” Phillips said. He doubted national pricing plan would be affordable where there wasn’t the protection of cable competition. “Duopolies don’t compete on price,” he said, referring to market that would be dominated by merged EchoStar-DirecTV and much smaller Pegasus. “In any industry of significant size, duopolies tend to compete on features sets,” Phillips said: “The dominant company provides price leadership and otherwise tries to stay out of trouble with the Department of Justice.” Deal also affects emerging broadband Internet services for customers too remote to receive either cable modem or DSL. “Broadband for rural America is too important to leave to one company,” Phillips said. Another issue raised was delivery of local programming by satellite services. Pagon said: “This is something the industry should have embraced 3 to 4 years ago. Capacity exists to do that, and if the merger happens there is no excuse.” Hartenstein agreed market was “not ready for another 10 or more channels of national programming” and added capacity from deal should be directed toward local programming. He wasn’t specific what merged company would do. Ergen said that as 2 networks currently existed, “there is no way to do local programming for rural customers. The capacity to do it exists, but [EchoStar and DirecTV] need a common standard. We now have a Beta-VHS situation.” While decision on technology hadn’t been made, he said, “when we do merge, the synergies will allow us to replace one system at our cost.” Having both companies using system with common standard, Ergen said, “will “double potential subscribers and we will be able to go to a lot more cities than we otherwise could. There never has been a merger with more compelling efficiencies.”

American Cable Assn. (ACA) is supporting NCTA and National Assn. for Deaf in their bid to ease financial burden on small cable operators by federal govt.’s requirements for emergency alert systems. However, in letter to FCC, ACA said any changes shouldn’t eliminate ability of small systems to seek EAS waivers from Commission on case-by-case basis. Like NCTA and NAD, ACA wants FCC to allow systems with fewer than 5,000 customers to install EAS decoder only to comply with EAS rules that take effect for small systems in Oct. ACA said current cost for EAS equipment and installation for smaller headends was $7,500-$10,000 and decoder-only option could decrease that cost 15%-20%. “For operators of hundreds and hundreds of very small headends, even these compliance costs will impose an impossible financial burden in 2002,” ACA Pres. Matthew Polka said.

Senate 94-2 approved report (H. Rpt. 107-350) for Dept. of Defense appropriations bill (HR-3338), which would provide DoD with $70 million boost for critical infrastructure protection (CIP) and information assurance programs. Under section providing additional emergency appropriations, conferees also recommended $237 million for FBI’s Trilogy information system program. This amount includes: (1) $56.7 million for information assurance and data digitizing. (2) $20.6 million for computer analysis response teams. (3) $12.2 million for “audio interception technology.” (4) $12.2 million for audio-video-image analysis program. (5) $8.7 million for wireless intercept program. (6) $6.4 million for Title III wiretaps. Report also recognizes “that terrorist organizations exploit the Internet to plan, coordinate, and initiate terrorist acts, finance terrorist activities, and recruit terrorists. To enable the FBI to continue its efforts to work with businesses and federal and state govts. to fight cybercrime, $61 million is provided for the national Infrastructure Protection Center, including not less than $12 million for the Special Technologies and Applications Unit, and $7.2 million is provided for regional computer forensic labs.” Supplemental funds also were approved to bolster Washington emergency response communications, including: (1) $45 million for Office of the Chief Technology Officer for “first-response land-line and wireless interoperability project.” (2) $14 million for district-wide response and communications activities. (3) $5 million for Metropolitan Washington Council of Govts. “to enhance regional emergency preparedness, coordination and response.” Amount includes $1.5 million to develop comprehensive regional plan, $500,000 to develop critical infrastructure threat assessment model, $500,000 to develop and implement regional communications plan.

Consumer groups said Comcast’s proposed $72 billion merger with AT&T Broadband would “place a chokehold” over nation’s access to TV, Internet and other broadband services and warned they would try to persuade federal regulators to block deal between nation’s first and 3rd largest cable operators. Two senators called for hearing early next year, saying they had “serious concerns” and want to explore impact of new AT&T Comcast as well as proposed merger of satellite service providers EchoStar and DirecTV. Sens. Kohl (D-Wis.) and DeWine (R-O.), chmn. and ranking minority member, respectively, on Subcommittee on Antitrust, said they were particularly bothered by rising cable rates. “We continue to believe that more competition, rather than additional consolidation, is needed in this industry,” they said. However, Kohl and DeWine said they also recognized potential benefits, such as introduction of cable telephony to more consumers as viable alternative to local telephone companies.

Resources needed to develop nationwide emergency communications system are subject of study under bill (S- 1651) by Sen. Jeffords (I-Vt.), which has been placed on Senate calendar. Bill, which had been reported favorably by Environment & Public Works Committee Dec. 17, was placed on calendar but hadn’t been addressed by our Dec. 18 deadline. Study would be conducted by Federal Emergency Management Agency dir. in consultation with FCC, Dept. of Defense, National Institute of Standards & Technology. It would include “review of use of the digital spectrum or the analog spectrum as a key component to meeting the urgent communications needs” of U.S. emergency response personnel. Bill is co-sponsored by Sens. Clinton (D-N.Y.) and Smith (R- N.H.).

Verizon Wireless withdrew its waiver petition for priority access service (PAS) at FCC, saying it was working with National Communications System (NCS) on “a more comprehensive, industrywide” solution. Verizon Wireless had been in talks with NCS to provide immediate term PAS, which first would require FCC waiver because certain agency guidelines couldn’t be met with currently available equipment. Verizon spokesman declined to say whether talks with NCS had broken off, but withdrawal would point to that result because waiver was needed before govt. contract could be signed. PAS service had been scheduled to start in Washington and N.Y. Dec. 10, although that date had passed without agreement between NCS and carriers. What Verizon withdrawal, submitted after close of business Thurs., does to pace of wireless PAS rollout that NCS had set following Sept. 11 attacks wasn’t clear late Fri., although VoiceStream said it still was talking with NCS about agreement. “We are planning to go ahead,” said Brian O'Connor, VoiceStream dir.- regulatory and legislative affairs. Comments are due at FCC tomorrow (Tues.) on VoiceStream waiver request for PAS that’s still pending.

Verizon Wireless said it would provide “advanced voice and data” component of Wingcast telematic service to be introduced next year. Wingcast is joint venture of Ford and Qualcomm and first telematics offering will be available in certain Ford and Nissan vehicles, company said. Exclusive deal allows Verizon to offer Wingcast customers voice-activated services over its national CMDA network, including emergency services, high-speed data, location-based applications. Wingcast will develop wireless voice plans exclusive to customer base and deliver telematics services over Verizon network. In areas where Verizon’s more advanced 1XRTT data network is available, Wingcast said it would develop services such as e-mail, enterprise software, Internet and company intranet access, commercial information, instant messaging, streaming video.

Verizon Wireless will provide “advanced voice and data” component of Wingcast telematic service to be launched next year. Wingcast is joint venture of Ford and Qualcomm and initial telematics offering will be available in certain Ford and Nissan vehicles, company said. Exclusive deal allows Verizon to offer Wingcast customers voice-activated services over its national CMDA network to include emergency services, high-speed data, location-based applications. Under agreement, Wingcast will develop wireless voice plans exclusive to customer base and deliver telematics services over Verizon network. In areas where Verizon’s 1XRTT data network is available Wingcast said it would develop services such as e-mail, enterprise software, Internet and company intranet access, commercial information, instant messaging, streaming video.

Wireless priority access service (PAS) didn’t start Mon. in Washington and N.Y. as planned under contract proposal that National Communications System (NCS) still is negotiating, sources said. VoiceStream and Verizon Wireless have waiver requests pending before FCC on guidelines for deploying wireless PAS. NCS earlier in fall had issued request for immediately available NCS capability for Washington, N.Y. and Salt Lake City, saying last month that Verizon would be tasked to provide short-term capability. VoiceStream also said it was in discussions with NCS and that its understanding was that contract award to Verizon wouldn’t be exclusive (CD Nov 23 p6). Of pending waiver requests, FCC spokeswoman said Tues. that “the matter is still under review.” One source said talks between carriers and govt. had reached impasse. Verizon Wireless spokesman declined to speculate on resolving negotiations, but said agreement with NCS must be reached and waiver from FCC received before initial PAS system could be implemented. In its request for partial waiver of FCC’s PAS guidelines, GSM carrier VoiceStream said it could roll out PAS capability that lined up priority call for next-available slot in system when radio or network resources were busy (CD Nov 30 p11). Last week, NCS filed in support of VoiceStream’s waiver request, similar to filing that backed Verizon’s request. In Dec. 6 filing, NCS said FCC’s PAS rules tracked closely with telecom services priority (TSP) system, which NCS also administers. “Handbooks and instructional material developed for TSP are being used as guides for development of wireless priority processes and procedures to ensure only qualified NS/EP [national security/emergency personnel] users are assigned priorities,” NCS told FCC. “While at this time there are no specially designated ‘authorizing agents’ to request priorities as contemplated by the rules, the NCS is working to identify them.” NCS said FCC guidelines also allowed it to assign priorities directly at request of users of PAS. NCS said it had contacted federal, state and local organization with national security and emergency duties in cities where immediate PAS system was in works and now was receiving requests for service.