Satcasters run into legal difficulties


A pair of Dish Network authorized distributors have been charged by the FCC, and Dish itself implicated, in do-not-call telemarketing violations. And DirecTV is facing court action in California in a case over early termination fees. Meanwhile, DirecTV is offering local-HD-into-local in two new markets.

The pleasant news first: DirecTV has added locla-HD-into-local service for Charleston-Huntington, WV, including ABC WCHS, CBS WOWK, Fox WVAH, NBC WSAZ and PBS WPBY. And it’s added service to Huntsville-Decatur AL, including ABC WAAY/ABC, CBS WHNT, CW WHDF, Fox WZDX, NBC WAFF and APT/PBS. That brings its local HD markets to 132.

But it is being hit with a lawsuit in the Los Angeles Superior Court for not only charging customers early termination fees, but for taking them directly out of customer bank accounts or charging customer credit cards without their knowledge.

The termination fees, which can be as high as $480, are under dispute in their own right, and the unauthorized payment collection has made people furious, leading to overdrafts and bounced checks.
“These days, many families are struggling to make ends meet. Now is the last time DirecTV should be plundering people’s financial accounts to pay a fee that we believe is unlawful,” said Harvey Rosenfield, founder of the non-profit Consumer Watchdog.

The plaintiffs say that the existence of the fees, which usually are applied if a subscriber leaves before 18 or 24 months, are not explained up front to new subscribers and are charged regardless of the reason for early termination, and are considered unlawful by the plaintiff’s group.

Meanwhile, the Federal Trade Commission has hit Dish Network authorized distributors with hefty fines over do-not-call violations. Vision Quest LLC is being hit with a civil penalty of $690K, and New Edge Satellite Inc. with a $570K civil penalty.

FTC says it had similar dealings with two other Dish distributors during the summer of 2008: Planet Earth Satellite Inc. and Star Satellite LLC.

FTC says it has also charged Dish Network with do-not-call violations “both on its own and through its authorized dealers” and that the matter is currently in litigation.

RBR-TVBR observation: It’s too bad the satellite services never materialized as effective competitors to cable. It’s referenced in part by the DirecTV case. The challenges of getting hooked up, to either cable or satellite, make it hard for people to simply move from one to the other when unsatisfied.

On top of the fact that switching from one to another is a physical challenge, the fact that the DirecTV will go after your wallet if you try to make a change makes the concept of competition between cable and satellite virtually meaningless.

It will be interesting to see if the same problems will exist if a subscriber wants to switch away from a telco MVPD.

Until movement between these three services is as simple as unplug-switch-plug, with short term contracts, all consumers can do is try to make their best guess as to which one will best serve their needs, sign on the dotted line, and live with their decision for who knows how long. And that is not real competition.