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Some Viacom Nets Not On DISH

Satellite dish on roof of house, on texture with VIACOM and DISH NETWORK logos, partial graphic
AP
Satellite television provider EchoStar Communications Corp. pulled the plug on MTV, Comedy Central, Nickelodeon and local CBS owned stations early Tuesday in a contract dispute with Viacom Inc. over the price of programming. Viacom-owned UPN stations are covered by a separate contract and were not removed from EchoStar.

As many as 9 million customers of EchoStar's DISH Network nationwide were affected, including 1.6 million who watch CBS programming in Dallas-Fort Worth, New York, Chicago, Los Angeles and other cities where CBS owns the local station. The move that could threaten their ability to watch, among other things, the NCAA men's college basketball tournament also known as March Madness.

In place of Viacom programming, some customers in the Denver area saw a message from EchoStar saying the multimedia giant was asking an unreasonable amount for its programming.

"Dish network sincerely regrets that this channel, owned and operated by Viacom, is currently unavailable," said the message. "Viacom has demanded rate increases which are unreasonable and would contribute to higher monthly bill for you. We continuously strive to control costs on behalf of our customers and are hopeful that this matter will be resolved quickly."

A statement from Viacom after the 3 a.m. EST contract deadline passed urged EchoStar customers to stop subscribing to the DISH Network.

"Current EchoStar-DISH Network subscribers who would like to continue receiving BET, CBS, Comedy Central, MTV, Nickelodeon, Nick at Nite, and all our other channels can easily switch," said a statement from spokeswoman Susan Duffy after the channels were turned off.

She said Viacom was "dismayed and disappointed" by the DISH Network decision, and said the company "refused to entertain a reasonable proposal or to negotiate in earnest."

"We have solid business partnerships with virtually every other satellite and cable TV operator — except for EchoStar-DISH Network," the statement said.

CBSNews.com is part of the Viacom family.

DISH also posted an announcement about the cancellation on its Web site, along with a plea for consumers to call CBS.

"DISH Network will always have a place for CBS and we're willing to pay for retransmission rights, but Viacom is holding the public airwaves hostage, trying to extract concessions and higher rates on programming unrelated to CBS," EchoStar chairman Charles Ergen said in a statement released as the deadline for the cancellation approached.

Introducing himself as "Charlie" Ergen, a recording of the executive reading his explanation was playing continuously on the system's Channel 101, where he often holds "Charlie Chats," reports CBS News Correspondent Peter King.

Echostar said Viacom had sought rate increases up to 40 percent over the length of the contract, which "potentially equates to hundreds of millions of dollars" in payments, Ergen said.

"Viacom's rate increases are definitely unreasonable. They're nearly four times the rate of inflation," EchoStar spokesman Steve Caulk told CBS radio station KNX. "They're tying the access to 16 local CBS stations to the other channels that we're not nearly as interested in, and that our customers are not nearly as interested in."

EchoStar said it would provide $1 monthly credits to customers who lose CBS programming, and another $1 for those who subscribe to additional Viacom channels.

But Viacom's statement says it couldn't understand EchoStar's position.

"They recently hiked their subscribers' bills by as much as $3 a month. Yet they are unwilling to consider paying an additional six cents a month per subscriber for the right to carry our channels," the company said.

DISH customers in markets in New York, Los Angeles, Chicago, Philadelphia, San Francisco, Boston, Dallas-Fort Worth, Detroit, Minneapolis, Miami-Ft. Lauderdale, Denver, Pittsburgh, Baltimore, Salt Lake City, Green Bay, Wis., and Austin, Texas, lost their local CBS and UPN affiliate programs as well.

Viacom and EchoStar began sparring after a contract for the DISH Network to broadcast Viacom channels expired Dec. 31.

The contract was extended at least three times, voluntarily and by court orders. The latest court order for the programming to continue expired at the overnight deadline.

In January, EchoStar filed a lawsuit in federal court in San Francisco alleging Viacom was illegally trying to force EchoStar to carry Viacom-owned MTV, Spike and other cable channels at unfair prices in exchange for the right to carry 18 CBS-owned stations in 16 media markets.

Ergen had said previously he would rather drop CBS than submit to Viacom's demands.

Englewood, Colo.-based EchoStar delivers hundreds of channels to 9 million subscribers.