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EchoStar reports Q2 results, Patent Office rejects TiVo claims

Fri, 08/10/2007 - 8:05am
Mike Robuck

EchoStar Communications said it gained 170,000 subscribers in the second quarter, down from 195,000 subscribers in the year-ago quarter, but its churn rate of 1.68 percent offset the increase in subscribers.

EchoStar’s Dish Network, the second-largest satellite provider behind DirecTV, now has a total of 13.6 million subscribers, but cited its churn rate as the reason for the 12.8 percent decline in subscriber additions from this quarter to the same time frame a year ago.

Overall, EchoStar’s second-quarter profit increased 33 percent due to subscribers paying more for advanced services such as HD and for equipment rental fees. In the second quarter, EchoStar said in its SEC filing that net income increased to $224.2 million compared to a net income of $168.8 million in the year-ago quarter.

Both Dish Network and DirecTV have reseller contracts in place with AT&T, but AT&T is expected to pick one of the satellite providers before the year is out. The satellite provider that loses out with AT&T will suffer a significant adverse effect, industry experts have said.

EchoStar also announced that the U.S. Patent Office has rejected some patent infringement claims by TiVo. Last year, a Texas jury ruled that some of EchoStar’s hardware DVR technology infringed on TiVo’s technology, but an appeals court stayed the verdict until October.

On July 30, the Patent and Trademark Office issued a “final office action” rejecting as invalid all of the hardware claims that TiVo asserted against EchoStar at the trial and which the Texas jury found the company had infringed upon. The patent office didn’t reject the two software infringement claims that TiVo asserted against EchoStar and which the jury sided with TiVo on. TiVo can appeal the final office action.

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