EchoStar Moves Fail to Revive Hughes Deal

[cnsf]

http://biz.yahoo.com/rb/021030/media_hughes_antitrust_2.html

Reuters
EchoStar Moves Fail to Revive Hughes Deal
Wednesday October 30, 11:05 am ET

WASHINGTON (Reuters) - U.S. antitrust enforcers are unmoved by last-ditch concessions from EchoStar Communications Corp. (NasdaqNM:DISH - News) and Hughes Electronics Corp. (NYSE:GMH - News) designed to win approval of their proposed $19.1 billion merger, a source familiar with the case said on Wednesday.

Attorneys at the U.S. Justice Department plan to file suit to block the merger within a matter of days, despite an offer by the companies to help create new competition by divesting some of their satellite television capacity, the source said.

The decision comes only two days after attorneys for EchoStar and Hughes pitched their concessions in a meeting with the chief of the department's antitrust division.

To assuage competition concerns, the companies offered to sell some of their satellite capacity to entertainment conglomerate Cablevision Systems Corp. (NYSE:CVC - News) Regulators at the Federal Communications Commission have already announced they are opposed to the merger.

[platinum]

This is good news I think this merger was bad for the consumers

[Scott Greczkowski]

I was just about to post this. :)

CNSF beat me to the punch. :goodjob:

[cnsf]

Originally posted by Scott Greczkowski
I was just about to post this. :)

CNSF beat me to the punch. :goodjob:

So, do I get a prize?

:D

The Cablevision proposal didn't make sense as they will most likely in serious financial trouble before the end of next year, having to sell off many non-core assets and not be able to invest in new ventures.

Look for a merger with a telecom in the near future......

[platinum]

hey scott i think this site is great

[Scott Greczkowski]

Great Platinum! We are happy to have you here! :hi:

CNSF, I would not be suprised to hear that Echostar is merging with Cablevision, that merger might fly. :) That would really make Dish Network the leader in HDTV. This is just a guess on my behalf though.

[cnsf]

Originally posted by Scott Greczkowski
Great Platinum! We are happy to have you here! :hi:

CNSF, I would not be suprised to hear that Echostar is merging with Cablevision, that merger might fly. :) That would really make Dish Network the leader in HDTV. This is just a guess on my behalf though.

I see something like AT&T and Comcast....maybe Cablevision and Sprint? Verizon? Verizon may be the better bet if there are no politics and relationships at play (a la YES Network....)

[PSB]

This is GOOD news for customers and small installation companys, like me : )

[platinum]

I've had Directv since '95 and i love it. I think Directv's picture quality is better than dish. I'm glad this merger isn't happening because i wasn't thrilled with the fact charlie ergen would be fair to us the consumer. His guaranteed one rate plan doesn't guarantee a fair rate.

[DarrellP]

Originally posted by platinum
I've had Directv since '95 and i love it. I think Directv's picture quality is better than dish.
Here we go again. :rolleyes:

[Crazy 1]

I'm also greatfull that the merger isn't going to happen. Because if charlie got control of D* who knows what a sub. might cost, and I've switched back to D* for a little over a year now. I had E* for a little while and was not happy with it.

[EvanS]

Originally posted by Scott Greczkowski
I was just about to post this. :)

CNSF beat me to the punch. :goodjob:

don't worry Scott - you need to be tracking that L104 download anyway. You don't have time for anything else :lol:

oohhhh, I know, that was cold :hi:

[thomasmaly]

Man that was cruel....

[Scott Greczkowski]

Damn what did he write? I missed it. I was too busy looking at my 721 screen waiting for the L104 software to download (Plus I was also looking for the Great Pumpkin as well) :lol:

[EvanS]

well taken Scott - nothing like an admin with a sense of humor!!

You know, I SO appreciate this site...everyone involved has done a wonderful job and this is a great group - thanks and keep it going!!!!

(all previous comments and accolades subject to retraction if L104 is not spooling by the time I take delivery of my 721 this coming Tuesday) oh man...I did it again lol

[Chris Freeland]

Oh well, I guess it is status qoe. Many of us will now never ever get are locals on satellite. Many will never get an affordable broadband solution. Same channels and pq that we have today. Cable prices will continue to go up and up. FCC, DOJ and others are sooooo short sighted, can only see the past and not the future. :(

[drjake]

If DOJ does file suit, it will effectively kill the merger because of timing. There is no way that the suit could be completed before the drop-dead date. As a Dish retailer, I never wanted to support the merger. As a lawyer, however, I believe that DOJ and FCC are interpreting the law wrong. If DISH and Directv were to fight the denial, my guess is that they would eventually prevail as it is hard to argue that the real service being provided is the provision of television services (not satellite TV). I know of all of the arguments regarding the lack of competition in rural areas, but my belief is that the courts would look at the nation as a whole and determine the merger provided better competition to cable for a significant majority of the population. However, because of the January drop dead date, the courts will not get to decide the case. Thus, us Dish retailers will not have to compete with the Best Buys and Circuit Cities for the near future (only Radio Shack, Walmart and Sears).

[DM]

drjake,

I guess, as a lawyer, you would have some inkling as to what is the relevant geographic market and the case law that would support the analysis. I am sure you understand the seminal Philadelphia National Bank case interpreting the Clayton Act Section 7. And one can't forget about the impact of the recent Heinz duopoly case.

Do you still practice law? With a license?

[drjake]

I still practice law as an Of Counsel. I believe that the government would cite Philadelphia National Bank and the various duopoly/oligopoly cases to support its case. That being said, because of the capacity constraints and the fact that cable has an effective monopoly on providing local channel services in many markets, I believe that the Government wouldn't prevail. Further, as recent mergers have shown (Bank One/ NBD First Chicago, Wells Fargo/First Interstate, NationsBank/Bankamerica), I am not sure that the market concentration prong of Phildelphia National Bank is still good law.

[Ray H]

L.A. Times 10/31/02

"Suit May Block DirecTV Deal

By Edmund Sanders, Times Staff Writer

Unimpressed by some last-minute concessions, state and federal antitrust officials are expected today to file suit to block the proposed marriage between EchoStar Communications Corp. and its satellite-TV rival Hughes Electronics Corp., according to sources close to the deal.

Executives from DirecTV, which is owned by Hughes, and EchoStar met Monday with Assistant U.S. Atty. Charles James and offered to give up some of their satellite frequencies to New York-based Cablevision Systems Corp., which wants to launch a rival satellite-TV service.

But antitrust officials, including state representatives from Missouri, New York and Connecticut, continue to believe the EchoStar-DirecTV merger would reduce competition and harm consumers. 'They got a very bad reception from both Justice [Department] and the states,' according to a source familiar with the meeting. 'States considered it a nonstarter and the Feds were highly skeptical.'

James skipped a follow-up meeting Tuesday with Cablevision officials, who attempted to show how their new service might restore competition in the satellite-TV market after the merger, a source said. 'We remain optimistic that the government will accept the proposed solution, which addresses every concern relating to competition,' a Cablevision spokesman said Wednesday.

The Federal Communications Commission blocked the merger this month, leaving most analysts to conclude that the deal is not salvageable.

An EchoStar spokesman declined to comment Wednesday.

Shares of Littleton, Colo.-based EchoStar fell 17 cents to $19.82 on Nasdaq. Shares of El Segundo-based Hughes, a unit of General Motors Corp., dropped 25 cents to $9.77 on the New York Stock Exchange."

[Curtis0620]

http://biz.yahoo.com/ap/021031/satellite_merger_1.html

[adsman]

"But antitrust officials, including state representatives from Missouri, New York and Connecticut, continue to believe the EchoStar-DirecTV merger would reduce competition and harm consumers. 'They got a very bad reception from both Justice [Department] and the states,' according to a source familiar with the meeting. 'States considered it a nonstarter and the Feds were highly skeptical.'"

This dosen't make any sense to me....How in the hell will this merger harm consumers. It's funny that people on this site and the people running the government departments don't know a damn thing about economics .

[Curtis0620]

Less competition = higher prices.

[adsman]

Originally posted by Curtis0620
Less competition = higher prices.

higher prices=less customers

less customers=company losing business

company losing businees=failing business

come on!!!!!

[Curtis0620]

Merger = higher debt
Higher debt without increased revenue = Higher losses
Higher losses = Bankruptcy

Come on!!!

[Timco]

More competition = lower prices
Lower prices = lower profit margin
lower profit margin = trouble for companies with alot of debt!