[opendtv] Echostar vs the Civilized World (was Fox vs Echostar)
- From: John Willkie <johnwillkie@xxxxxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Fri, 1 Sep 2006 10:03:48 -0700 (GMT-07:00)
I would agree that the non-settlement between Fox and Echostar raises
media-concentration and issues concerning News Corp's ownership of a national
broadcast network, local stations and effectively, a controlling interest in
DirectTV.
However, it isn't what comes first to my mind.
Imagine how much worse the situation would be worse if the FCC had been foolish
enough to permit Charlie Ergen to own (effectively) Echostar and a controlling
interest in DirecTV.
Ponder just these two VERY CONTEMPORARY items:
-- Echostar was adjudged to have WILFULLY infringed on Tivo's patents on DVR
service, in a case where they decided to roll their own after they were given
confidential system information by Tivo, which up to that point had been
attempting to license their technology to Echostar. (The case is pending
appeal, but Echostar has about as much chance of getting a reversal as they do
keeping a cup of spit warm in a snowstorm.)
-- Echostar was adjudged to have WILFULLY infringed on the contractual rights
of network owned and other affiliate stations using FRAUDULENT engineering
analyses (a friend of mine used to perform them, and he told me
ocntemporaneousy that the criteria didn't match the rules). The trial judge
(before whom the pending petition for injunctive relief lies) found that
Echostar's contract and employee engineers were not believeable on the stand.)
The judge ruled that they had to stop service to ILLEGAL customers at an
indefinate point in the future. Echostar, the fools, appealed. The appeals
court reversed the trial court, to the extent that they told Echostar to either
settle with the plaintiffs, or they had to stop service to ILLEGAL and (the
few) LEGAL customers on September 7. Echostar appealed, but their thin case
won't be heard for months, the emergency appeal unavailing. In the meantime,
Echostar's Charlie Ergen overplayed his hand, saying he would go to Congress,
which has never held hearings on the matter in this Congress, and has to pass
the federal budget and whatever else they can manage in the few legislative
days left in this Congress.
Fox's filing is just an attempt to play with the deadline by which Echostar
must either pay what News Corp wants, or has to lose about $150 mm in annual
revenue by cutting off the people that they have ILLEGALLY (and a few legally)
provided network signals.
Fox doesn't need to settle with them, since they have their own satellite
footprint, but Echostar MUST settle with News Corp, or they will irreparably
harm Echostar's business.
One might even posit that ABC, CBS and NBC settled because they had a weaker
hand -- lacking a satellite footprint -- than Fox. It also tends to validate
Stanley Hubbard's position vis a vis USSB that broadcaster needed to get into
the DBS business.
With all due respect, Mark, to focus on the media-ownership "issue" is only
somewhat more relevant than the thread hereabouts a while back where Philips
patent to prevent users from tuning away from commercials (or emergency
announcements) was opined (by others) to have broadcasters behind it, and
something they were likely to use. Commercial television won't work if the
viewers aren't happy with the fare. "TV Bondage" is not something that would
benefit commercial broadcasting.
Back to the instant cases I suspect that Echostar is negotiating the terms of
surrender to News Corp, and I suspect there are "favored nations" clauses in
the settlements between the other networks and Echostar, so a plentiful
settlement could cost Echostar more than the $100mm they've agreed to pay the
others.
On the Tivo front, they could buy the company for about $700 mm instead of
paying the $90 mm judgment and keep new Tivo users to themselves. That would
raise a whole new set of issues, but one gets the impression that Ergen doesn't
want to own IP, he only wants to steal it where he can, and for as long as he
can.
The next few days will be VERY interesting, in a bet-the-enterprise sort of
way. With News Corp holding the best hand.
John Willkie
EtherGuide Systems
P.S. In the interest of full disclosure, I would have serious problems being
as assertive in writing on such a case were it the broadcasters who had
infringed on Echostar's IP, since my customer base is broadcast stations and
networks, and to a lesser extent, cable television. I wouldn't license
anything to Echostar if they paid double up front and they were on the other
side of a 100 foot pole.
Mark Schubin wrote:
I think this is an interesting example of media-ownership issues:
http://www.multichannel.com/article/CA6367824.html
TTFN,
Mark
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