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Angry customers may go from Dish to Direct

By Kimberly S. Johnson

Denver Post Staff Writer
DenverPost.com
Article Last Updated:11/24/2006 10:26:00 AM MST

Alice Mitchell and her late husband had spent more than three months a year traveling the country in their recreational vehicle, using a Dish Network receiver to view local broadcasts from Denver and Los Angeles.

Earlier this month, Mitchell, who lives in Monroe, Wash., 35 miles northeast of Seattle, received a letter from Dish Network, telling her that she wouldn't receive those channels after Dec. 1.

Mitchell, 65, has been eligible to receive distant-network signals for RV travel because her local satellite signal dies once she leaves the area.

"They said our RV waivers are no good anymore," Mitchell said in a phone interview.

Mitchell is one of 900,000 Dish home, business and RV customers losing out- of-area network channels, following a U.S. district court ruling in October against Douglas County-based EchoStar Communications Corp., which provides Dish service.

Some customers have already been shut off. Most, like Mitchell, are frustrated.

"I'm going to lose the Eastern feeds," said Eddie Stintson, a full- time "RVer" currently parked in Aguanga, Calif., 50 miles northeast of San Diego.

"Home is where I park (my RV). Local signals are not designed for travel," he said. "When you get up and leave, say goodbye to locals until you get back."

In the October ruling, the judge upheld a May appellate court ruling that Echo- Star violated copyright law by beaming network programs broadcast from far-away cities to households ineligible to receive them.

Distant-network channels are ABC, NBC, CBS and Fox broadcast channels that originate outside a customer's local community.

To qualify for a distant signal, customers have had to prove they can't receive their local stations on an over-the-air antenna. In the past, when that has been the case, EchoStar customers could choose from a variety of local stations nationwide - even faraway markets such as New York City or Los Angeles.

But now, EchoStar customers will be restricted to local stations from their designated market area, generally the closest big-city TV channels. Dish offers local channels from more than 160 cities.

Dish subscribers in Denver who pay for local Denver channels will not lose their service, but local signals from other cities will be gone.

Jimmy Schaeffler, senior multi-channel analyst for The Carmel Group, said the judge's ruling is going to hurt EchoStar.

"It's a major thorn in Echo Star's side," he said. "Not only are they going to lose subscribers, but they (lose them) to the enemy."

EchoStar is the nation's second-largest satellite TV provider with a total of 12.8 million subscribers.

It competes with DirecTV, which is the No. 1 satellite TV provider with more than 15.5 million customers.

Since the court case went against EchoStar, DirecTV has been aggressively marketing in areas where Dish customers will lose their distant-network signals.

DirecTV, which is owned by Rupert Murdoch's News Corp., will check to see if customers are eligible to receive the networks.

If they are eligible, customers can purchase broadcast network packages from either Los Angeles or New York City, depending on whether they live in the Eastern or Western portion of the U.S., said DirecTV spokesman Robert Mercer.

EchoStar co-founder and chairman Charlie Ergen said during a November earnings call that fees for distant-network signals bring in $3 million in monthly revenues. The company expects to lose subscribers due to the shutoff.

"I think the part I feel worst about is customers trust us, and customers rely on us for their networks, and we as a management team made some poor decisions in hindsight," said Ergen during the call.

Earlier this month, U.S. Sen. Patrick Leahy of Vermont introduced a bill that would allow resumption of distant-network signals to EchoStar customers in remote areas.

Sen. Wayne Allard of Colorado also has introduced a bill to allow both satellite and cable-TV providers to broadcast Denver TV signals to subscribers in La Plata and Montezuma counties in southwestern Colorado.

The judge's ruling prohibiting distant-network service eliminates feeds of Denver stations to those customers because they are in the designated market area for Albuquerque, not Denver.

Congress will not meet until after Dec. 1, so there's no immediate relief for subscribers.

Meanwhile, Stintson, the RV owner from California, said that if he can't get the distant networks, he plans to switch to DirecTV.

For her part, Mitchell is tuning to the CBS website to watch streaming video of shows such as "CSI."

"It really rankles me that someone tells me that I have to go with my local affiliates," she said. "They're pushing me away and pushing me to the Internet."