The two sides have battled for more than six years over Dish’s alleged infringement of TiVo’s patents on its digital video recording technology.

On Wednesday, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, upheld a district court finding of contempt and award of sanctions against Dish parent EchoStar Communications Corp. for failing to comply with an injunction.

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Now please stand next to Apple, Google, Amazon and Netflix. But don’t crowd the cable guys over in the VIP section. And remember to keep your wallet handy!

Of course Microsoft wants to beam TV shows to your house, for a fee. Everyone else does!

And Redmond has been at it longer than most — Bill Gates, and then Steve Ballmer, have been headed toward your living room for more than a decade.

They could get there, too. If they’re willing to pay up.

But what Microsoft won’t be able to do is fundamentally reshape TV distribution. Same goes for every other would-be player who wants in.

That’s because the TV programmers, who make their money from advertising and cable subscription fees, are happy to sell their stuff to new buyers. But they’re not going to work with new outlets that undercut their existing ones.

Ask Apple, who tried rounding up programming for a $30-a-month subscription offering last year, and ended up settling for a handful of 99-cent-an-episode rentals 9 months later.

Or more to the point, ask DirectTV, or Echostar, or Verizon, or AT&T. All of those guys have elbowed their way into a market once owned completely by cable. But none of them have changed the business: They all sell, more or less, the same thing your local cable company does, at more or less the same price.

The cable guys weren’t happy about the competition, but there’s not a lot they could do about it. As long as the new guys paid the same rates, there’s no reason for the programmers not to sell their stuff to them. But they won’t work with distributors that threaten their old business.

And that old business isn’t going away. Even as the cord-cutting drumbeat gets louder, programmers are winning rate increases for their cable shows. And they’re extracting new fees for broadcast shows — the ones they used to give away. Ask Cablevision. Or Time Warner Cable, etc.

So if Microsoft — or anyone else — isn’t willing to pay the going rate for first-run TV programming, they can try getting into the more modestly priced market for second-run shows — the stuff you can see on Hulu and Netflix now.

And watching “30 Rock” the day after it airs on regular TV may be worth something, to some customers. But for most people, it won’t be enough to replace regular TV. Which is exactly what the industry wants.

(Remember Screech? Not entirely SFW)

Earlier this week, the Wall Street Journal reported that a Chapter 11 filing likely was imminent.

“Through the restructuring, TerreStar Networks hopes to lessen its debt obligations in order to place greater focus on delivering the future of ‘always available’ mobile communications through its recent launch of the world’s first integrated satellite-cellular smartphone,” the company said.

The company also said it signed an agreement to receive $75 million of debtor-in-possession financing with EchoStar, its largest secured creditor.

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TiVo’s shares jumped 9.7 percent to $10.08 in 4 p.m. Nasdaq trading, while EchoStar slid 1.1 percent to $19.30 and sister company Dish Network Corp. (DISH) fell 2.7 percent to $19.10.

“This decision by the PTO is final and not appealable by EchoStar,” TiVo said. It also expressed confidence a federal appeals court will uphold and enforce an injunction against EchoStar’s “ongoing willful infringement of the time-warp patent.”

EchoStar had no immediate comment Wednesday. Dish didn’t immediately respond to requests for comment.

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Speaking on the sidelines of the Allen & Co. media conference in Sun Valley, Mr. Krikorian said television manufacturers like Sony (SNE) and Samsung have an opportunity to band together to compete with companies that are developing ways to blend traditional cable programming with Internet content.

Mr. Krikorian expressed deep skepticism that Google, in particular, could dominate the market of piping digital television and other Internet content into consumers’ living rooms. It is also an open question, he said, whether Apple, whose Apple TV software he praised, can take a lead in the space, or whether cable companies or even TV manufacturers have an opportunity to step in.

Mr. Kirkorian was a central player in the first wave of attempts to connect the Internet and television, founding Sling Media, which makes it possible for users to watch content from their home TVs on mobile phones and computers. He sold Sling Media to EchoStar in 2007 but has continued to advise a number of small and large companies in the digital-media industry.

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“Because we find that the district court did not abuse its discretion in imposing sanctions against EchoStar, we affirm the finding of contempt,” the court wrote in the 36-page ruling.

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You see, DISH, though it had been barred from shipping DVRs with the patent-infringing functionality, continued to do so, justifying its behavior by claiming it had implemented a noninfringing workaround. But in June of this year, a court found that not to be the case. The court again reprimanded EchoStar (SATS) and ordered the company to pay TiVo (TIVO) $103 million in additional fines for the violations that occurred during the time in which the “workaround” was implemented. And now, it has added another $200 million to that.

TiVo, as one might imagine, was overjoyed by the ruling, which leaves open the possibility of further sanctions if EchoStar does not abide by the injunction.

“We are pleased by the Court’s ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a Court-ordered permanent injunction, and to award TiVo its attorney fees and costs incurred during the contempt proceedings,” the company said in a statement. “This brings total damages and sanctions in this case to approximately $400 million through July 1, 2009, plus attorney fees, and is exclusive of potential further damages and sanctions. Additionally, we are pleased that the Court ‘will seriously entertain the award of enhanced sanctions’ if ‘EchoStar is unsuccessful on appeal and nevertheless continues to disregard this Court’s orders.’”

Who knows, if DISH keeps it up, TiVo may get that $974.5 million yet.

You see, DISH, though it had been barred from shipping DVRs with the patent-infringing functionality, continued to do so, justifying its behavior by claiming it had implemented a noninfringing workaround. But in June of this year, a court found that not to be the case. The court again reprimanded EchoStar (SATS) and ordered the company to pay TiVo (TIVO) $103 million in additional fines for the violations that occurred during the time in which the “workaround” was implemented. And now, it has added another $200 million to that.

TiVo, as one might imagine, was overjoyed by the ruling, which leaves open the possibility of further sanctions if EchoStar does not abide by the injunction.

“We are pleased by the Court’s ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a Court-ordered permanent injunction, and to award TiVo its attorney fees and costs incurred during the contempt proceedings,” the company said in a statement. “This brings total damages and sanctions in this case to approximately $400 million through July 1, 2009, plus attorney fees, and is exclusive of potential further damages and sanctions. Additionally, we are pleased that the Court ‘will seriously entertain the award of enhanced sanctions’ if ‘EchoStar is unsuccessful on appeal and nevertheless continues to disregard this Court’s orders.’”

Who knows, if DISH keeps it up, TiVo may get that $974.5 million yet.

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The idea is to protect cable subscription revenues by giving pay TV customers–but only pay TV customers–Web access to all the shows they get on TV, and hoping this keeps them from canceling their subscriptions.

But that’s old news: Comcast (CMCSA) already told Bloomberg earlier this month that the two companies are linking up, and that Time Warner (TWX) would offer programming from some of its networks in the first part of Comcast’s tests.

Presumably Bewkes and Roberts will offer up a few more details, like which Time Warner networks are participating (good bet: TNT and/or TBS), along with a timetable. But I worry that the press conference will be light on details, in large part because many of the details haven’t been hammered out yet.

Still, I’ve been able to glean more from industry executives who’ve been involved in discussions with Time Warner, Comcast and other players in the authentication effort, which Bewkes has been calling “TV Everywhere” and Roberts has been calling “OnDemand Online.” Some of the details:

• The test will start very small–with some 5,000 subscribers–but Comcast is determined to expand it aggressively and wants to have it available throughout its system by the end of the year. Comcast plans to use its Fancast video portal as a hub for its efforts. And it  may use other digital assets it has acquired as well. Online Rolodex Plaxo, for instance, which the company bought last year, could be used to help subscribers sign in to watch their shows.
• The test is separate from Time Warner Cable’s (TWC) own authentication offering, which is essentially the same thing but will launch later than the Comcast test, using different technology, and will likely offer a different mix of programming.
• And those tests are separate from the one that telcos Verizon (VZ) and AT&T (T) have been working on with satellite operators Echostar (SATS) and DirecTV (DTV). That one also has the same thrust, but will take the longest to roll out.
• Comcast isn’t likely to announce other programming partners for the tests until later this month.
• Hulu is interested in playing along, because its owners–GE’s (GE) NBC, News Corp.’s (NWS) Fox and Disney’s (DIS) ABC–see authentication as a way to appease riled-up cable providers. The cable guys are upset that Hulu shows (some) cable programs for free while they have to pay for the right to air them. In theory, authentication solves that problem for Hulu because everyone will be on a level playing field: Only cable subscribers will get access to cable programming, whether it’s on Hulu, Fancast or anywhere else. But the cable guys aren’t rushing to let Hulu in just yet.
• Separately, NBC has been talking about offering some cable programming that isn’t already on Hulu for the tests. That could also be seen as an appeasement move, but I’ve heard a more benign suggestion: NBC merely wants to figure out if authentication technology works because it is considering using it for some of its coverage of the Vancouver Olympics next year.
• CBS (CBS), which isn’t a part of Hulu and which doesn’t have any cable assets of its own, would still like to get into the mix. The idea is that the network would offer the cable guys shows that it has kept offline until now (say, “The Mentalist”) while tying the Web programming to “retransmission” fees it would like to extract from the cable companies for all of its shows. Comcast executives seem amenable to the notion.
• Big cable players like Viacom (VIA) and Liberty’s (LINTA) Discovery may participate in some trials but not others. Viacom, for instance, has been talking about working with the telco group but not with Comcast during the trials. It has also discussed offering a “premium product”–like access to the full “Spongebob Squarepants” library or other kids’ shows that have a very limited online profile–to Time Warner Cable subscribers for an additional fee.

Bewkes and Roberts are scheduled to speak at the Time Warner Center at 9:45 am EDT, so we’ll know more shortly.

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The  TV advertising market is $70 billion, give or take a few billion. So when peeling off a few million dollars from that constitutes progress, you can see just how far Google (GOOG) has to go.

In fairness, Google’s TV business isn’t really designed to get ad commitments, at all–the whole idea is that advertisers can buy spots on the fly, the way they can with its core Web business. So this at least constitutes a willingness on the part of ad buyers to give the platform a shot.

But that platform is still pretty small after a couple years of work: Advertisers can use Google to reach viewers using Echostar’s (SATS) service, and some of GE’s (GE) NBC Universal cable networks, but that’s about it.

The program, created by Echostar’s (SATS) Sling group, is designed to let users watch TV shows, beamed from their own sets, on the  iPhone. It goes on sale for $29.99 today via Apple’s (AAPL) iTunes store–but without the ability to work over AT&T’s 3G network.

That’s our decision, says AT&T (T). The company’s rationale: The iPhone’s too powerful, and our network isn’t powerful enough.

That’s the gist of its argument, which both makes sense and confuses. AT&T says the Sling app could consume lots of network capacity, which is straightforward enough. But you can already use Sling apps for other handsets, like the BlackBerry, on AT&T.

The difference, AT&T says, is that the iPhone really isn’t a phone at all, but a PC that happens to make phone calls. “We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.”

No argument there, either. But again, given that you can use the SlingPlayer over AT&T’s spectrum using different devices, it seems as if AT&T is really making a different argument: Just because you can watch TV on other devices doesn’t mean you will. But if we give people the chance to watch TV on iPhone, they’ll flock to it–and our network can’t handle that.

See for yourself. Here’s AT&T’s full statement, via Engadget:

Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network. The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service. We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.

That said, we don’t restrict users from going to a Web site that lets them view videos. But what our terms and conditions prohibit is the transferring, or slinging, of a TV signal to their personal computer or smartphone.

The Slingbox application for the iPhone runs on WiFi. That’s good news for AT&T’s iPhone 3G customers, who get free WiFi access at our 20,000 owned and operated hot spots in the U.S., including Starbucks, McDonalds, Barnes & Noble, hotels, and airports. AT&T is the industry leader in WiFi.

[Image credit: Markhillary]

Not the greatest of terms. Still, Sirius CEO Mel Karmazin has managed to save the company from bankruptcy and from satellite mogul Charlie Ergen without accepting a change in control for the company. And the deal is not subject to the approval of the Federal Communications Commission.

“This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM,” said Sirius CEO Mel Karmazin. “By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”

At 20 cents, Sirius shares are up an astonishing 85.89 percent on news of the deal.

PREVIOUSLY:

• Call Me Mel “Save-My-Own-Keister” Karmazin
• Sirius-EchoStar-Liberty: Ménage-à-Blah
• Sirius: Give Me Liberty or Give Me Ergen
• A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
• Sirius Rolls Out New 24 Hour Investor Keening Channel
• Sirius Debt Problems? Call EchoStar! No Upfront Fees!
• Sirius XM: The Beginning of the End or the End of the Beginning?
• Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
• Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”

Sirius XM (SIRI) is ready to seek bankruptcy protection. The company has warned investors that it’s prepared to file Chapter 11. It has hired bankruptcy and restructuring advisers. And it has filled out the necessary paperwork. But it may never file it.

“People familiar with the situation” tell The Wall Street Journal that Sirius CEO Mel Karmazin and satellite mogul Charlie Ergen are moving closer to an accord that would save the struggling satellite radio outfit from having to file Chapter 11. Apparently, Ergen has agreed to allow Karmazin to keep his job if he agrees to a deal, and that’s been concession enough to keep him at the negotiating table, though he continues to pursue an alternative, and perhaps fantastical, deal with Liberty Media (LINTA).

PREVIOUSLY:

• Sirius-EchoStar-Liberty: Ménage-à-Blah
• Sirius: Give Me Liberty or Give Me Ergen
• A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
• Sirius Rolls Out New 24 Hour Investor Keening Channel
• Sirius Debt Problems? Call EchoStar! No Upfront Fees!
• Sirius XM: The Beginning of the End or the End of the Beginning?
• Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
• Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”

Sirius XM (SIRI) is ready to seek bankruptcy protection. The company has warned investors that it’s prepared to file Chapter 11. It has hired bankruptcy and restructuring advisers. And it has filled out the necessary paperwork. But it may never file it.

“People familiar with the situation” tell The Wall Street Journal that Sirius CEO Mel Karmazin and satellite mogul Charlie Ergen are moving closer to an accord that would save the struggling satellite radio outfit from having to file Chapter 11. Apparently, Ergen has agreed to allow Karmazin to keep his job if he agrees to a deal, and that’s been concession enough to keep him at the negotiating table, though he continues to pursue an alternative, and perhaps fantastical, deal with Liberty Media (LINTA).

PREVIOUSLY:

• Sirius-EchoStar-Liberty: Ménage-à-Blah
• Sirius: Give Me Liberty or Give Me Ergen
• A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
• Sirius Rolls Out New 24 Hour Investor Keening Channel
• Sirius Debt Problems? Call EchoStar! No Upfront Fees!
• Sirius XM: The Beginning of the End or the End of the Beginning?
• Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
• Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”

In a note to investors this morning, Collins Stewart analyst Thomas Eagan described the possibility of Liberty acquiring or even investing in the struggling satellite radio concern as “highly doubtful.” Explaining his skepticism, Eagan notes, “We do not believe that Liberty initiated the dialogue with [Sirius]. Additionally, we believe [DirecTV] management does not want [Sirius] combined with its operations. [DirecTV] certainly does not need it. Their operations lead the industry.”

Over at Barclays Capital, James M. Ratcliffe and Vijay Jayant are equally skeptical of an alliance between Sirius (SIRI) Liberty (LINTA). “Liberty involvement is more likely an effort by Sirius XM to attract a competing bidder, in our view–we don’t believe the company is fundamentally interested in becoming involved in the satellite radio business,” they wrote, adding that a Sirius bankruptcy is still a distinct possibility. “Chapter 11 would allow the restructuring of above-market OEM revenue share contracts and branded programming contracts, improving operating cash flows,” they explained. “On the other hand, it would result in aggressive competition among the various capital stakeholders and create a significant management distraction for as much as eighteen months.”

For Sirius, bankruptcy may be a more attractive option than cutting a deal with EchoStar’s (SATS) Ergen, but that’s not really saying much. Anyway, Sirius has about a week to decide between the two.

PREVIOUSLY:

• Sirius: Give Me Liberty or Give Me Ergen
• A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
• Sirius Rolls Out New 24 Hour Investor Keening Channel
• Sirius Debt Problems? Call EchoStar! No Upfront Fees!
• Sirius XM: The Beginning of the End or the End of the Beginning?
• Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
• Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”

The Sirius XM fiasco is fast becoming high drama. Hoping to avoid bankruptcy and fend off an unsolicited takeover attempt from satellite mogul Charlie Ergen’s EchoStar, which has been acquiring its debt, Sirius has approached Liberty Media about a possible transaction. “People briefed on the negotiations” say talks between the two companies are advanced, but it’s not yet clear how much Liberty would be willing to invest in Sirius and whether it’s even interested in taking control of the company.

Like EchoStar (SATS), Liberty Media’s interest in Sirius (SIRI) revolves around the company’s physical assets–satellite and terrestrial repeaters, towers that bolster satellite radio services with Liberty’s DirectTV (DTV) satellite television services. Said Stanford Group analyst Fred Moran: “All of these companies are satellite-delivered media. If you can cross-market, cross-promote and intertwine services between satellite video and satellite audio, you could strengthen your competitive position.”

Question is, is Liberty Media (LINTA) interested in such a thing and is it willing to repay Sirius XM’s debts and buy out the company’s existing shareholders to do it? If it’s not, Sirius may well be forced into bankruptcy, which company officials reportedly claim is preferable to inking a deal with Ergen and EchoStar. Seems Sirius CEO Mel Karmazin can’t bear the thought of giving up control of the company to Ergen.

Sirius shares are trading higher this morning on the news after being viciously beaten down Wednesday by reports that the satellite radio company is mulling a Chapter 11 bankruptcy filing.

PREVIOUSLY:

• A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
• Sirius Rolls Out New 24 Hour Investor Keening Channel
• Sirius Debt Problems? Call EchoStar! No Upfront Fees!
• Sirius XM: The Beginning of the End or the End of the Beginning?
• Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
• Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”

“People close to the company” tell the New York Times that Sirius may be days away from filing Chapter 11.

From the Times:

Sirius has been working with the restructuring expert Joseph A. Bondi of Alvarez & Marsal and the bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to help prepare a Chapter 11 filing, people close to the company said. The documents and analysis are close to being completed and a filing could come within days, according to a person familiar with the matter.”

Or not. A bankruptcy filing would wipe out shareholders, among them Karmazin, who invested $2.7 million in Sirius (SIRI) stock last summer. And with Ergen’s offer reportedly still on the table, it would expose Sirius’s management to shareholder lawsuits. So perhaps the threat of a possible bankruptcy filing made through the media is a bluff to force Ergen’s hand. After all, just because the company has hired bankruptcy and restructuring advisers doesn’t necessarily mean a filing is imminent.

Sirius shares, which had been trading a bit higher than their typical 12 cents a share, have fallen deep into the mud on the news. They’re down more than 40 percent to six cents as I write this.

A nasty price for shareholders to pay if this is truly a high-stakes game of chicken….

PREVIOUSLY:

• Sirius Rolls Out New 24 Hour Investor Keening Channel
• Sirius Debt Problems? Call EchoStar! No Upfront Fees!
• Sirius XM: The Beginning of the End or the End of the Beginning?
• Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
• Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”

Sirius CEO Mel Karmazin obviously doesn’t share that view, though he may soon come round.

With just a week or so left until its first round of debt obligations come due, Sirius (SIRI) is in a tight spot. As Karmazin told investors last week, the company needs to raise $175 million, and quickly. If it can’t, it will end up either filing for bankruptcy or cutting a deal with Ergen. Given that Karmazin himself invested $2.7 million in Sirius stock last summer, Karmazin may well opt for the latter. Unless, of course, another potential investor–say AT&T (T) or Liberty Media (LINTA)–comes sniffing around. Either way, it’s going to be a volatile and stressful week for Sirius investors.

Just why EchoStar is amassing this debt is unclear. It may be looking to take control of the company outright to gain its physical assets–satellite and terrestrial repeaters (towers that bolster reception of satellite signals). Or it could be setting the stage for some sort of alliance under which it would use those assets to help build a network for delivering mobile video in cars and consumer devices. A partnership is certainly a possibility. As a commenter on yesterday’s post noted, the companies may have an intermediary in former Sirius CEO Joseph Clayton, who sits on EchoStar’s board. Said Janco Partner analyst April Horace, “There clearly is a relationship and some triangularity between Sirius and Dish and EchoStar, taking into consideration that Joe Clayton now sits on the board of EchoStar. Joe knows Sirius like the back of his hand.”