Hundreds of thousands of EchoStar Communications satellite-TV subscribers could lose cheap access to their favorite local sports and news broadcasts, after a U.S. Supreme Court justice turned down a request to halt a service shutdown.
Douglas County-based EchoStar’s appeal was rejected by Justice Clarence Thomas on Tuesday, who handles emergency appeals out of the 11th U.S. Circuit Court of Appeals. The appeals court ruled against EchoStar, which operates the Dish Network.
The ruling could cost EchoStar, the nation’s second-largest satellite-TV provider, as many as 800,000 subscribers and as much as $50 million in yearly revenue if it is forced to turn off its distant-network TV signals, said Craig Moffett, vice president and senior analyst at Sanford C. Bernstein and Co., an industry research firm.
EchoStar’s revenue from distant-network channels is less than $5 per distant-network subscriber per month.
No date has been set for Echo Star to turn off the distant-network TV signals, said Kathie Gonzalez, an EchoStar spokeswoman. But in its second-quarter report released this month, EchoStar said it would “likely commence (but not complete) shutoffs of distant network channels during the third quarter of 2006.”
“We’re doing everything we can to avoid unnecessary disruption to our customers,” Gonzalez said. “We continue to explore every option available to our customers who watch distant-network channels.”
EchoStar estimates that less than 10 percent of its 12.5 million subscribers get those TV networks outside their home markets. Following Tuesday’s ruling, those subscribers may defect to other satellite providers, Moffett said.
“EchoStar’s loss could be DirecTV’s gain,” Moffett said. “Most of these customers live in rural markets, and in a lot of cases, cable isn’t an option.”
DirecTV is the nation’s largest satellite-TV company, with 15.5 million customers.
In the meantime, DirecTV plans to take advantage of the ruling and try to woo those customers away from EchoStar, said Robert Mercer, a spokesman for the satellite-TV company in El Segundo, Calif.
About 1.5 million DirecTV customers who wanted network TV programming already received waivers from local TV affiliates to keep DirecTV in compliance with federal law, Mercer said.
EchoStar doesn’t have the same widespread agreements with independent, local TV affiliates and the Fox Broadcasting Co. Fox and DirecTV are controlled by News Corp.
EchoStar asked the Supreme Court to block a ruling that barred it from transmitting network-station signals to customers outside of a station region. Thomas handled the petition on the case.
Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.
