EchoStar Communications [DISH] confirmed its refusal to meet Viacom‘s [VIA] demands for rate hikes and other contract terms forced the satellite TV service provider to stop carrying 16 Viacom owned-and-operated CBS local stations and 10 of its nationally distributed channels at midnight.

Among Viacom’s “strong-arm tactics,” EchoStar claimed, is a demand that EchoStar’s DISH Network carry Viacom-owned channels that offer “little or no measurable appeal” to viewers in exchange for the rights to carry the 16 owned-and-operated CBS stations. Earlier this year, Viacom threatened to withhold the Super Bowl from DISH Network customers until a federal judge intervened. EchoStar has challenged Viacom in court on antitrust issues by noting that Viacom is leveraging its control of the public airwaves — acquired by Viacom for free. The court fight is ongoing.

“DISH Network customers in the cities with CBS owned-and-operated stations are entitled to keep up with local news and events distributed over publicly owned airwaves, and Viacom is interfering with that right,” said Charles Ergen, chairman and CEO of EchoStar. “DISH Network will always have a place for CBS, and we’re willing to pay for retransmission rights, but Viacom is holding the public airwaves hostage, trying to extract concessions and higher rates on programming unrelated to CBS.”

“Viacom has asked for rate increases up to 40 percent over the length of the contract — or nearly four times the rate of inflation,” according to an EchoStar statement. “That demand potentially equates to hundreds of millions of dollars in payments by DISH Network plus additional payments for other channels that would offer little or no value to DISH Network’s customers — while saddling them with the costs. Viacom’s demands for carriage of low-interest channels impede DISH Network’s ability to provide new, independently owned channels with a broad appeal, EchoStar officials said.

DISH Network is providing a $1 monthly credit to customers who lose CBS programming in the following markets: Austin, Boston, Baltimore, Chicago, Dallas-Ft. Worth, Denver, Detroit, Green Bay, Wis., Miami-Ft. Lauderdale, Minneapolis, Los Angeles, New York, Pittsburgh, Philadelphia, Salt Lake City and San Francisco. Other channels affected by Viacom’s demands include BET, Comedy Central, MTV, MTV2, MTV Espanol, Nickelodeon, Nick Games & Sports, Noggin, VH1, VH1 Classic, and CBS-HD East and West. Viacom officials countered that their company has tried unsuccessfully for months to reach an agreement with EchoStar. “We are dismayed and disappointed by EchoStar/DISH Network’s decision to pull the plug on our channels,” Viacom officials said. “We have solid business partnerships with virtually every other satellite and cable TV operator–except for EchoStar/DISH Network. It is hard for us to make sense of their position. They recently hiked their subscribers’ bills by as much as $3 a month. Yet they are unwilling to consider paying an additional six cents a month per subscriber for the right to carry our channels.” For in-depth coverage of this story, see an upcoming issue of Satellite News. For more information about subscribing to PBI Media’s satellite newsletters, check out our Web site at www.satellitetoday.com.