Dishing the Regs

15 March 2004


DishTV Drops Viacom Channels for 36-Hours

Starting Tuesday morning last week, there was no Nickelodeon, no BET, no MTV or any other Viacom owned station for subscribers to DishTV, the satellite TV system from EchoStar. While the dispute was a simple one concerning money and was settled in 36 hours, the absence of these channels offered a chance for competitors and raises questions about network ownership.

The business-to-business problem was about the fee EchoStar would pay to Viacom to carry these channels. As Viacom stated, EchoStar just bumped some subscribers' bills $3 per month but refused to pay an extra 6 cents per month to get some of Viacom's offerings. On the other hand, Viacom raised the priced four times more than the rate of inflation and demanded that DishTV carry networks like "Nicktoons" as well as the ones it wants. The run up to this was rather ugly, as Viacom would run a marquee during programming asking viewers to call DishTV, which Dish would then black out. On Tuesday, Dish provided all the phone numbers to local CBS affiliates (Viacom's flagship) on its website to jam lines and went nuclear by providing names and phone numbers of local advertisers.

While the bean counters bicker, the opposition was scoring points. For those who have the option, cable may become more popular, or DirecTV, a satellite competitor of EchoStar that settled on Viacom's terms right away. And who really needs VH1 for anything other than background noise? "Real World vs. Road Rules" is merely appalling. Moreover, when was the last time CBS showed anything remotely innovative?

Of course, the regulatory issue here is who owns the airwaves. Viacom may simply own too many stations for the public good, forcing bad products on carriers in addition to networks the public wants. Because the signals enters the home from a satellite to a dish, it is riding on common property. Both Viacom and EchoStar raised the question of whether deregulation of ownership has gone too far. Should the consumer have to pay for "Spike" (an alleged network for men) in order to watch Dan Rather's newscasts? That doesn't seem to be how the market is supposed to work, with weak products being forced on consumers in addition to what they really want.

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