EchoStar needs to clear hurdles

LITTLETON, Colo. (CBS.MW) -- It wasn't long ago that Charlie Ergen was making the same claims against DirecTV that others are about to make against him.

In February 2000, Ergen's EchoStar Communications filed suit against its larger rival in the satellite television game, charging that DirecTV threatened retailers into muscling EchoStar's Dish Network service out of the marketplace.

EchoStar charged DirecTV and its parent, Hughes Electronics, with violating "federal and state antitrust laws in order to protect its market share," according to EchoStar's 2000 annual report.

Now Ergen wants to buy Hughes, and he faces the embarrassing prospect of having to do an about-face in front of regulators. Among the inquiries he faces: "You said it was unacceptable for there to be one satellite service offered at electronics superstores. Why is it OK now?"

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It will be relatively easy to answer that one. Predatory practices in attempt to limit a competitor is an anti-trust violation. The same might hold true if there was a HOSTILE bid by one DBS company to absorb the other. But in htis case it is a cooperative, vountary merger. There is no attempt by one to put the other out of business.

Whether or not the E* suit had merit will never be deteremined as the suit is now dismissed by agreement.