EchoStar Pulls Plug on Viacom in Bitter Fight

The blackout occurred after EchoStar Communications Inc., the nation's second largest satellite TV provider, and Viacom Inc., owner of CBS, Black Entertainment Television and the MTV Networks, failed to reach an agreement to renew their distribution contract.

As a result, an estimated 1.6 million Dish customers were left without their local CBS television station in 16 cities nationwide, including Los Angeles. About 10 million customers across the country were stripped of 10 other Viacom channels, including Comedy Central, TV Land and VH1.

The turn of events caught many analysts and consumer advocates by surprise. They had expected a quick resolution of the contract dispute because of the potential for political, financial and consumer backlash.

"When it comes down to it, this is about how two companies divide up the money," said consumer advocate Andrew Schwartzman of the Media Access Project. "Nobody thinks it will last that long."

During a live broadcast Tuesday on the Dish Network of "Charlie Chat," a call-in program in which EchoStar co-founder Charles Ergen answers subscriber questions, the media mogul said the two companies were back at the bargaining table trying to hammer out a deal.

In the interim, EchoStar has agreed to give Dish customers a credit of as much as $2 a month to compensate for lost service.

For Viacom, the stalemate threatens to reduce CBS' ratings and its advertising revenue just eight days before one of its biggest events of the year, "March Madness," the fervently watched NCAA basketball tournament.Viewers learned of the dispute over the weekend when Viacom ran a "crawl" across its telecasts warning all customers, not just those affected, that Dish subscribers could lose its programming. The crawl included an EchoStar phone number viewers could call to complain. People who called the number heard a recording suggesting they call Viacom.

One of the phone numbers provided was for Viacom President Mel Karmazin's home. Sources say Karmazin received more than 1,000 calls before disconnecting the line. Viacom executives were furious, the sources say.