* Cablevision founder Charles Dolan to testify Monday
* Opening arguments presented on Friday
* Cablevision sues Dish for $2.4 billion
* Dish says Cablevision did not invest enough in Voom
By Liana B. Baker
Sept 28 Dish Network is so "obsessed" with
beating No. 1 satellite provider DirecTV that it schemed
to get out of a pricey Cablevision contract when its larger
rival began to offer more HD channels, an attorney for the cable
company said on Friday.
In the opening arguments of a multibillion legal battle
pitting Cablevision Systems Corp against Dish Network
Corp in New York State Supreme Court, Cablevision
attorney Orin Synder said Dish was "hell-bent" on getting out of
a contract covering a high definition channel package offered by
Voom HD, then a unit of Cablevision.
In the four-year-old lawsuit, Voom HD sued Dish Network for
$2.4 billion in damages, alleging it violated a 15-year contract
to carry HD programming, including channels devoted to Kung Fu
and video games.
Dish, with fewer subscribers, was like "Burger King" to
DirecTV's "McDonalds" and did whatever it could to get an edge
on new subscribers, including breaking the contract with
Cablevision, Snyder said.
"Why pay for Voom when you can get more established channels
at no cost?" he added.
Dish carried the Voom channels for two years, but HD content
became cheaper and more widely available for popular channels
such as ESPN. Meanwhile, Dish rival DirecTV increased the number
of HD channels it carried and slashed the cost for its
customers, making Dish desperate to get out of its expensive
agreement with Voom.
The Voom HD channels are a holdover from a unsuccessful
attempt by Cablevision to launch its own satellite TV service in
2003 to compete with Dish Network - then known as EchoStar
Communications Corp - and DirecTV. The money-losing service
failed to attract subscribers and was shut down in 2005.
The main champion of Cablevision's satellite venture was
Charles Dolan, a cable industry pioneer and billionaire who
founded the cable television company and Time Warner's HBO. The
86-year-old Dolan will be the first witness for Cablevision and
will testify on Monday morning.
Other witnesses include James Dolan, the chief executive of
Cablevision and owner of the New York Knicks basketball team,
and Josh Sapan, CEO of AMC Networks Inc. Charles Ergen, the
founder chairman of Dish, will testify on its behalf.
Dish attorney James Bennett argued the company, then known
as EchoStar, ended the agreement because Cablevision did not
fulfill a requirement of the contract that Voom HD spend at
least $100 million a year on the service in the first five years
of the deal. It said Cablevision only spent about $60 million on
programming in 2006, while the rest went to overhead.
A key question the jurors will have to answer is whether
Cablevision spent that amount and what the term "service" means.
Dish said it refers to programming costs, while Cablevision said
it refers to the entire Voom HD business, including marketing
Voom HD is now a part of AMC Networks, which Cablevision spun
out last year, meaning that the long dispute could also have
repercussions for the company responsible for bringing viewers
critically acclaimed shows such as "Mad Men" and "Breaking Bad."
Dish Network blocked out AMC Networks from its 14 million
customers in July and analysts have said the outcome of the
trial could decide whether Dish ever carries the channels again.
The trial is expected to last a month. The case is Voom HD
Holdings v. EchoStar Satellite, New York State Supreme Court,
New York County, No. 600292/2008.