Another Tough Week Ahead for DBS Merger

[Steve Mehs]

Today could begin another crucial week for efforts by EchoStar and DirecTV to save their proposed merger in Washington, D.C.

For several weeks, there has been talk that the Justice Department and its antitrust staff would make a decision on the proposed transaction by the end of the month. And it has been reported that the DOJ's antitrust staff will recommended that regulators block the proposed merger on the grounds the combination would be anti-competitive.

However, there has been no official word from the Justice Department on any pending action concerning the merger. And there is still uncertainty on the timing of any announcement from DOJ on the merger proposal. It's also expected that the companies may make a last-ditch effort to sell the merger to DOJ personnel before a decision is made by the department.

On Oct. 10, the Federal Communications Commission said it would block the proposed merger. The FCC gave the companies 30 days to address its concerns and come up with concessions and/or remedies. The companies have until Nov. 22 to offer their alternatives to the commission.

From SkyReport (http://www.skyreport.com/skyreport/oct2002/102802.shtm#one) (Used with Permission)

[jeffwtux]

For all but the top 35 or so markets there's going to be a monopoly anyways. Dish and Direc are intentially going after different DMAs. They will each end up with 70 different DMAs + the top 35. For the majority of the DMAs there won't be competition with or without the merger. DOJ AND FCC, I hope you're happy.

[platinum]

this merger is a joke it leads to a clear monopoly, i dont want charlie ergen in control of the only satellite service available. this merger will raise rates.

[raj2001]

Originally posted by platinum
this merger is a joke it leads to a clear monopoly, i dont want charlie ergen in control of the only satellite service available. this merger will raise rates.

I have one choice remaining if this merger goes through, and I'm using it!! Cable it is!!

[Ray H]

Agree completely, Platinum! Unfortunately, DirecTV's status quo without a merger is also in doubt. G.M. is slathering over the prospects of the billions a sale would entail. Guess who's got the bucks (and the interest) in buying? Yep, "G'day Mate". The irony is if Charlie's unable to wiggle out of the non-performance clause he put his john-henry to, he could end up in enough financial trouble that ol' Rupe might make another run for Dish Network, too! Nightmare on Elm street - II. It's head they win, tails we lose. (Happy Halloween, channel surfers!)

[jeffwtux]

Well, if you live in Harrisburg PA, Burlington VA, Greensboro NC, Norfold VA, Tuscon AZ, Reno NV, and virtually ever city that doesn't yet have locals, it will still be a monopoly. They will now have the PERMISSION OF THE FCC AND THE DOJ to cooperate not to compete over locals in any additional cities. Most people would call that anti-trust, but oh well.

[jeffwtux]

Raj, platinum, and ray: There is one fact that I know for sure: MERGER OR NO MERGER, NO PERSON WHO DOES NOT HAVE CABLE WILL EVER HAVE COMPETING DBS PROVIDERS WITH LOCALS.

[jeffwtux]

BTW: I meant access to cable.

[platinum]

i read alot of the articles on the fcc site regarding this merger and they will be able to offer locals to all markets without this merger

[platinum]

i also would like to know if we will own the new boxes if the merger goes through. i spent good money on the 4 boxes i own.
whats to stop charlie ergen from saying the new echostar owns the new equipment.

[DCSholtis]

I for one will be HAPPY to see Murdoch take over D*.....I dont want Ergin anywhere near Directv......Im afraid if the merger goes thru eventually that guy will take both companies down.....Bring on Rupert!

[jeffwtux]

platinum: physically or financially?? Sure they can both get a carriage deal for every Fargo ND, but will there be enough subsribers to each DBS provider for the satellite provider to even break even?? Do they have to take a loss just so everybody can have competition??? They might be able to physically(and it's funny how all the people opposed to the merger are all experts and say they know for sure that the required spectrum is available), but it will cost them a ton of money every month in the name of competition. That's bad business. If the FCC and DOJ are going to reject the merger, then I say that Dish and Direc have free license to use any and all means to make a profit and compete with cable.

[PSB]

If Rupert models DirecTV on BSKYB Ergin can say good bye to his company. I cant wait! Go Bob!

[Mike123abc]

Echostar has the capacity for LIL to all markets, DirectTV really does not. But, they will probably never do LIL to all markets without a merger because it is simply not profitable. Why put up a satellite to serve the last 50-75 markets when there is only a few people in these markets? LIL is used by the sat companies to sign up "new" users. If there are not enough "new" users when they add LIL to the market it is not worth the resources to add the market. They are not doing it to make the current DBS subscribers happy, they are doing it to make DBS more attractive to people that have not signed up yet.

Their formula works like this: it costs us XXX to provide LIL to this market, if we add LIL our experience shows we will get x% more people subscribing, will that increase in market share make enough profit to cover the XXX cost? If so it is worth adding the market.

The top 40-50 markets will probably get both providers. The next 100 markets will be lucky to get one or the other provider. It makes much more sense to enter a different market than waste resources sharing a smaller market. Both have indicated that they would do about 80 or so markets of LIL. If they both do the top 50 then they probably would pretty much split the next 100 markets up serving about 60-80 of them.

[James_F]

Again, let me get my "pig fade"picture...

http://members.cox.net/jamesf1/media/pig_fade.jpg

[platinum]

in reality this merger is bad news for consumers, this merger will not bring down cable rates, and dbs rates will go up just because charlie ergen promises a one rate plan doesnt mean it'll be a low rate.
this merger should be rejected because it will be a monopoly and charlie's divesture to cablevision is a joke it will be years before it's a competitor to the behemoth he would have.

[jeffwtux]

platinum: why do you care? You can get cable and they have to beat that deal. For anybody who doesn' t have cable, they will NEVER EVER EVER EVER EVER EVER EVER have competing DBS providers with local channels, MERGER OR NO MERGER. The FCC isn't concerned about you, sorry. They are concerd about people living in rural communities that don't have access to cable. They will never get competition with locals merger or no merger. They will at best be served by a monopoly, merger or no merger.

[raj2001]

Originally posted by jeffwtux
platinum: why do you care? You can get cable and they have to beat that deal. For anybody who doesn' t have cable, they will NEVER EVER EVER EVER EVER EVER EVER have competing DBS providers with local channels, MERGER OR NO MERGER. The FCC isn't concerned about you, sorry. They are concerd about people living in rural communities that don't have access to cable. They will never get competition with locals merger or no merger. They will at best be served by a monopoly, merger or no merger.

Jeff, quit whining. As you said in DSLR, you live in AN EXTREMELY WEALTHY SUBURB. If you are so gosh darned rich why don't you get a C-Band dish?

[platinum]

I read several articles on how Charlie Ergen wouldn't give up spectrum to a competitor because he needed it all to compete with with cable. Now his merger is in deep doo doo and he's prepared to help Cablevision launch a dbs service. If you supposedly need all the spectrum to compete with cable why can you suddenly give some up and still compete.

[jrjcd]

i wish they would hurry up and drive the final stake in the heart of this deal...