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Judge: Dish May Tier Voom

5/09/2008 8:00 PM Eastern

Rainbow Media's Voom HD lost a round in court last week against EchoStar when a judge refused to issue a preliminary injunction to stop the suite of HD-only networks from being moved to a less-penetrated tier.

New York Supreme Court Judge Richard Lowe's 15-page ruling rebuffed Voom's effort to temporarily block EchoStar and Dish Network from relegating its 15 HD networks to a tier, “DishHD Ultimate,” instead of the satellite-TV provider's more widely penetrated HDTV basic offering, “DishHD Essential.”

EchoStar declined to comment, but the Voom HD services have been shifted to the “Ultimate” HD tier. DishHD Essential is $10 a month, while DishHD Ultimate is an additional $10 on top of that, for $20 total a month.

Lowe found that Voom “failed to demonstrate a likelihood of success on the merits” of the case.

EchoStar told Voom on Jan. 30 that it was terminating their 15-year carriage deal effective Feb. 1 and wanted to totally drop Voom's HD suite from the Dish Network lineup, according to the complaint filed by Voom. Voom then sought a preliminary injunction. Its lawsuit, also seeking a permanent injunction and declaratory judgment against EchoStar, is still pending.

“This litigation is ongoing and it would be inappropriate to comment at this time,” a Rainbow spokesman said last week.

In its original complaint, Voom charged that if EchoStar drops Voom's HD networks, it would cause Voom HD “irreparable and devastating harm” and threaten “its continued existence.”

EchoStar claims Voom violated a provision of their carriage deal where Voom agreed to spend $100 million a year on a 21-channel version of the service. The satellite provider said it would terminate its contract with Voom because of the alleged spending shortfall unless Voom agreed to be carried on a “tiered” basis.

Voom's only other distributor at present is its parent company, Rainbow owner Cablevision Systems. That carriage deal expires June 30.

In 2005 EchoStar bought Voom's satellite from Cablevision for $200 million. An EchoStar affiliate, EchoStar Media Holdings, got a 20% stake in Voom HD as part of that sale. The Voom-EchoStar affiliation agreement also flowed out of that transaction.

September