12-12-01, 05:07 AM
Missouri Attorney General Jay Nixon has been voicing concern about the proposed $25.8 billion merger between EchoStar and DirecTV, and has taken his opposition of the deal to Washington, D.C.
In a letter sent to U.S. Attorney General John Ashcroft last month, Nixon said his office will investigate the merger between Hughes Electronics, owner of DirecTV, and EchoStar. Nixon urged the Justice Department to intervene as well.
In his letter to Ashcroft, Nixon said most Missouri households in rural areas do not have access to cable. The merger would give the single DBS entity a monopoly in rural areas, he said, and that control would allow the new company to raise prices at will, cut service and neglect innovative products for customers.
"Allowing this acquisition would leave rural Missouri without this important service and create a market with little competitive incentive to provide the service," Nixon said. "Thus rural Missouri will fall even further behind urban areas in the competition for economic development. Businesses are less likely to locate in areas where they do not have full access to the same tools as their urban competitors."
In response, EchoStar sent Congressional testimony given by CEO Charlie Ergen last week that states the company feels it's not creating a monopoly through its merger with DirecTV. Rather, a combined company would compete in the larger multichannel market, and would have 17 percent of the market compared to 80 percent held by cable. Also, Ergen pointed out that Pegasus and the National Rural Telecommunications Cooperative have rights to distribute certain programming from DirecTV in rural areas, and could surface as an additional competitor along with C-Band.
"The only way to remove the barriers to competition and realize a more competitive marketplace is by taking advantage of the extraordinary efficiencies and synergies created by combining EchoStar and Hughes," Ergen said. With the merger, rural residents could have access to high-definition TV, Internet services and network programming, offerings that could be limited with spectrum constraints, he said.
From www.skyreport.com (http://www.skyreport.com) (Used with permission)
In a letter sent to U.S. Attorney General John Ashcroft last month, Nixon said his office will investigate the merger between Hughes Electronics, owner of DirecTV, and EchoStar. Nixon urged the Justice Department to intervene as well.
In his letter to Ashcroft, Nixon said most Missouri households in rural areas do not have access to cable. The merger would give the single DBS entity a monopoly in rural areas, he said, and that control would allow the new company to raise prices at will, cut service and neglect innovative products for customers.
"Allowing this acquisition would leave rural Missouri without this important service and create a market with little competitive incentive to provide the service," Nixon said. "Thus rural Missouri will fall even further behind urban areas in the competition for economic development. Businesses are less likely to locate in areas where they do not have full access to the same tools as their urban competitors."
In response, EchoStar sent Congressional testimony given by CEO Charlie Ergen last week that states the company feels it's not creating a monopoly through its merger with DirecTV. Rather, a combined company would compete in the larger multichannel market, and would have 17 percent of the market compared to 80 percent held by cable. Also, Ergen pointed out that Pegasus and the National Rural Telecommunications Cooperative have rights to distribute certain programming from DirecTV in rural areas, and could surface as an additional competitor along with C-Band.
"The only way to remove the barriers to competition and realize a more competitive marketplace is by taking advantage of the extraordinary efficiencies and synergies created by combining EchoStar and Hughes," Ergen said. With the merger, rural residents could have access to high-definition TV, Internet services and network programming, offerings that could be limited with spectrum constraints, he said.
From www.skyreport.com (http://www.skyreport.com) (Used with permission)