updated 3/9/2004 7:00:18 PM ET 2004-03-10T00:00:18

EchoStar Communications Corp. pulled the plug on Viacom Inc. programming across the nation Tuesday as their escalating fee dispute left as many as 9 million customers without MTV, Nickelodeon and other cable channels, plus CBS shows in more than a dozen cities.

The loss of the upcoming NCAA men’s basketball tournament carried by Viacom-owned CBS was of particular concern, especially to college basketball fans, sports bars and other businesses.

The disruption is the largest since 2000, when a similar dispute between Time Warner cable and ABC blacked out service to 3.5 million cable customers.

The latest fight affected all 9 million subscribers to EchoStar’s satellite DISH Network, costing them such Viacom-owned channels as MTV, VH1 and Nickelodeon. Englewood, Colo.-based EchoStar also pulled CBS programming in cities including New York, Los Angeles, Chicago, Philadelphia, San Francisco, Miami, Boston, Denver, Minneapolis and Dallas.

“We have customers who are calling and asking, ‘Where’s my CBS?”’ EchoStar spokesman Mark Lumpkin said. “It’s understandable that you would be upset if you lose your CBS channel.”

Customers hoping to watch the disrupted channels instead saw a message accusing Viacom of asking for an unreasonable rate increase that would result in higher monthly cable bills for EchoStar customers.

“We are willing to negotiate as soon as Viacom is willing to be reasonable,” EchoStar spokesman Steve Caulk said. However, he said he knew of no negotiation plans.

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, with the latest court order expiring late Monday.

EchoStar says Viacom has illegally tried to force it to carry channels at unfair prices in exchange for the right to also carry 18 CBS-owned stations in 16 markets. It said New York-based Viacom sought rate increases up to 40 percent over the length of the contract, which would total potentially hundreds of millions of dollars.

“Viacom, which owns CBS, got the airwaves for free from the American public, allowing them to provide CBS,” Caulk said. “Now they’re using that as leverage to force us to pay ridiculous amounts for other channels people don’t necessarily want.”

Viacom officials said EchoStar was fighting over what amounted to 6 cents more per customer per month.

“They’re talking about a 40 percent increase. That number is overblown,” Viacom spokeswoman Susan Duffy said.

Mark Rosenthal, president and chief operating officer of MTV Networks, had sharp criticism of EchoStar.

“This is channel yanking by a distributor on an unprecedented scale,” Rosenthal said during a conference call. “The last thing we ever want to do is wind up in a situation where our viewers can’t get the channels and shows they love.”

Rob Sanderson, an analyst with American Technology Research in San Francisco, said the dispute was bad news for both companies.

“Echostar would rather not disrupt services to the number of people affected,” he said. “On the Viacom side, their advertisers don’t like to see them lose any potential eyeballs or reach for advertising.”

He said Viacom would have to take the next step to restart negotiations.

EchoStar said it planned to give $1 monthly credits to customers who lose CBS programming, and another $1 for those who subscribe to additional Viacom channels. Besides CBS, media conglomerate Viacom also owns MTV and the Paramount movie studio.

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