VOOM progresses against EchoStar

Some readers might remember VOOM, an all-HDTV broadcasting system that was something of a pioneer in backing high-definition TV.  It launched initially with 21 channels in 2003 on its own satellite (Rainbow-1). VOOM was backed by Charles ‘Chuck’ Dolan, but a split in the Cablevision boardroom and a row between various members of the Dolan family led to the end of its own transmissions.

Its satellite was sold to EchoStar which agreed to carry a VOOM-branded service. Its remaining 15 channels were subsequently carried by the then EchoStar Dish Network  over the USA. However, on May 12th 2008, ten of the channels were removed from Dish, and the others followed a day later.  Cablevision’s own clients had access to Voom’s channels until January 2009.

Voom started legal proceedings four years ago against Dish Network, arguing for $2.5 billion in compensation. On January 31st a New York State Supreme Court judge ruled that EchoStar had destroyed key documents considered critical to the case.  Appellate Division Justice Sallie Manzanet-Daniels wrote, “Although VOOM may have other evidence to point to, the missing evidence is from a crucial time period during which EchoStar appears to have been searching for a way out of its contract. EchoStar’s internal communications undoubtedly concerned issues about what it understood the contract to mean, a contract that the motion court has now found to be ambiguous.”

The core argument rests on the EchoStar/Dish agreement to carry the Voom channels for 15 years as part of its agreement to buy Rainbow-1 for $200 million. The case will now go to trial, and most observers see this as a risk for Dish Network.

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