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Commentary
Can
Dish Network Be Trusted?
By Swanni
Washington, D.C. (December 5,
2010) -- Dish Network CEO
Charlie Ergen sometimes brags about his days as a Blackjack
'card counter' in the casinos of Las Vegas. In fact, the young
Ergen was so good at skirting the Rules of the House that he was
banned for life from playing in Sin City.
As a reporter who has followed Ergen and Dish Network now for
nearly two decades, I have to say that the wheeler-dealer still
acts as if the rules don't always apply to him. Or at least his
company does.
Over the years, Dish has gotten entangled in numerous business
relationships that have provoked charges of deception from
partners and customers, and sometimes even judges, attorney
generals and federal investigators. The company's executives
have never been charged with a crime, but like Ergen's card
counting, Dish's modus operandi is bending the rules, leaving
people to question whether it's trustworthy.
In Dish's defense, the satcaster's questionable tactics are
often designed to keep subscriber costs down or enable it to
provide a more viable alternative to satellite rival DIRECTV.
But that doesn't excuse what is sometimes a breathtaking
disregard for the truth and commonly accepted industry behavior.
Is that a Dish
Network executive?
The latest example of this "what can I get away with?"
philosophy came last week when Dish Network issued a press
release saying it was adding the MoviePlex channel to its 'HD
Platinum' package.
Now the HD Platinum package is supposed to be a package of
high-def channels for HD subscribers. (In fact, I called Dish's
1-800 number on Friday and they assured me that every channel in
the HD Platinum package is in HD; they also assured me that
MoviePlex was in HD.) But as it turns out, MoviePlex is not even
available in HD; it's a standard-definition channel.
However, by saying in the press release that MoviePlex was only
being added to the 'HD Platinum' package, Dish left the
impression that the channel is in HD.
Why would it do that? The HD Platinum package costs an extra $10
a month; the more channels in the package, the more likely that
people will subscribe to it. (Plus, Dish and DIRECTV are engaged
in an HD channel war; each service is trying to create the
perception that it has more HD channels than its rival.)
Dish spokeswoman Francie Bauer told me via e-mail on Friday that
the channel will also be added to Dish's America's Top 250
package, which is not a 'HD centric' package. However, she did
not respond when I asked her why that fact wasn't included in
the press release. She also didn't respond to two inquiries as
to whether people would think MoviePlex is in HD if it's now
part of the 'HD Platinum' package.
Now you might say the MoviePlex dust-up is not a big deal. But,
folks, I'm just getting warmed up. This is only the latest
chapter in a long history. For instance:
Lying About HD
Channel Counts?
* In April 2010, Dish Network issued a press release
saying it now had 200 HD channels. However, when a few reporters
(including yours truly) asked for a list of the channels, the
company initially refused. But it later relented and it turned
out that the 200 HD channel count included 57 HD PPV titles.
That's right. Dish was (and still is) counting a single PPV
movie as a channel.
Destroying Evidence?
* The Denver Business Journal reports that a New York state
court this month sanctioned Dish Network for destroying emails
that was considered evidence in its lawsuit with the failed Voom
TV service. (Voom is seeking $2.5 billion in damages from Dish
because the satcaster dropped its 15 HD channels from the air;
Voom, which soon closed its doors after the channels were
dropped, claims that Dish violated its contract to carry the
channels.) The judge's sanction means that the jury in the Dish/Voom
case will be told that Dish destroyed evidence.
Patent Violations?
* Dish has been involved in a six-year patent battle with DVR
company TiVo. (TiVo says Dish violated its patent by installing
similar software in its DVRs.)
In 2006, the satcaster lost a jury trial in Texas, requiring it
to pay TiVo more than $100 million in damages. But the judge
also ordered Dish to disable its DVRs because of the patent
violation.
Dish has since filed numerous appeals, as is its right. However,
the judge in the original case has filed a contempt order
against Dish (which Dish is appealing) and many neutral
observers would say that Dish's legal strategy is largely a
stall. Since the case began, TiVo's subscriber totals have
fallen from 4.4 million to 2.3 million and the company has been
dramatically weakened by the lack of a resolution in the case.
Breaking Federal Laws?
* The Federal Trade Commission ruled in 2009 that Dish violated
federal law when its customer service reps called people who had
signed up on the 'Do Not Call' registry. The agency also said
the company made 'robocalls" (automated messages) in violation
of the federal telemarketing rules. Dish blamed the calls on
third-party partners, but agreed to offer
restitution to eligible
consumers. (In part
because of the FTC decision, the Better Business Bureau has
given Dish Network just a 'C+' rating for overall trust issues.)
Not Playing by the Rules?
Last month, at Dish's request, a federal arbitrator ruled on the
impasse between Comcast and Dish over how much the latter should
pay to carry SportsNet California, which broadcasts San Jose
Sharks and Sacramento Kings games. The arbitrator ruled in
Comcast's favor, but instead of accepting the ruling, Dish
removed the sports channel from the air and it's still off as of
today.
Dish was not required by law to accept the ruling, of course,
but it's odd for a company to reject an arbitrator's decision
when it was the one to actually request it. It's also doubtful
that the federal arbitrator would have intervened if it had
known that Dish was simply 'gaming the system' -- if it had won,
it would have accepted; it lost, so it didn't.
Unfair Business
Practices?
Dish Network last year agreed to pay $6
million to settle charges that it improperly
marketed, promoted and sold its products and
services. The case was brought by attorneys
generals in 46 different states; the state
officials claimed that Dish hid certain
restrictions in promotional advertisements.
Utah Attorney General Mark Shurtleff said
after the settlement: "This settlement
should send a clear signal that companies
must treat their customers fairly."
There are more instances of
similar behavior that go back several years, but I'll let you
consult Google to learn more. There's also the fact that Dish
has been involved in lawsuits with numerous companies over the
years, from DIRECTV to TiVo to News Corp. to ESPN to Sonicview
to the Federal Communications Commission. For some reason, the
company has trouble reaching resolutions without legal action.
Every company has reason to sue (or be sued) from time to time,
but Dish's lengthy history of legal snafus again suggests the
company doesn't like to play by the normal rules.
And there are even more reasons
to wonder whether you, as a consumer, can trust what Dish
Network says and does. The satcaster has gotten involved in
several fights with programmers over the last year, which forced
it to drop some popular channels from its lineup. For instance,
Dish viewers were without their favorite Fox regional sports
channels for nearly a month and they have been without four
Disney HD channels since early summer.
Dish believes in playing hardball in programming renewal talks
so you just never know when it will drop one (or more) of your
favorite channels.
Bottom Line: Dish Network
now has more than 14 million subscribers and it has done many
admirable and innovative things to stay competitive with larger
rivals, such as DIRECTV and Comcast. The satcaster has also been
a consistent supporter of HD, adding channels in the last
several months when DIRECTV would not.
But the company needs to stop playing fast-and-loose with the
facts, getting involved in frequent lawsuits and engaging in so
many fee fights with its programming partners. The constant
turmoil -- and questionable promotional tactics -- only leaves
current and prospective customers feeling uneasy and asking the
question:
Can Dish Network be trusted?
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