Ergen Talks Merger, DISH 301 and Locals

[Steve Mehs]

EchoStar CEO Charlie Ergen said he's still very interested in pursuing his company's merger with DirecTV and Hughes, saying it's "the right thing for competition."

Ergen, speaking during his monthly Charlie Chat with retailers Tuesday, admitted that the merger is in a tough position, given that it was rejected in October by the Federal Communications Commission and by the antitrust staff at the Justice Department. "It's an uphill battle to get it done," he said. "But at DISH Network we have had tough things before."

He said there is room for the satellite TV merger, especially given the pending mega-merger of cable giants Comcast and AT&T Broadband. Discussions continue on remedies that may allow for regulatory approval of the combination, as well as a court challenge of the government's decision to block the deal. However, Ergen pointed out to his TV audience that Hughes can walk away from the merger agreement in January.

As for the DISH 301 set-top box outage, in which around 100,000 systems were knocked out of service late last week, Ergen said the glitch "was a little bigger than minor." However, he told retailers that most affected customers had their service restored days after the event.

Ergen also praised retailers for their efforts to get DISH 301 customers back in service.

Ergen also revealed two more local TV markets that will be added to the DISH Network slate. On Nov. 21, customers in Buffalo and Des Moines, Iowa, will get their locals from DISH Network.

The additions bring to 51 the number of local TV markets offered by DISH Network, a figure floated by EchoStar as the maximum number of local TV markets the company can deliver without a merger with DirecTV. However, Ergen said Tuesday that capacity aboard EchoStar VIII may allow the company to add a couple of additional cities.

From SkyReport (http://www.skyreport.com/skyreport/nov2002/111302.shtm#one) (Used with Permission)

[AJ2086]

When will he give up! DOJ and FCC have given him a no. Its not going to happen. And the ATT-Comcast Merger does not create a monopoly. In most areas only one cable provider is available so its not going to limit the choice they have, the people in that area will be able to choose cable, D* or E* or CBand. But if you merge E* and D* you have no competition. So Charlie crying that they merged ATT and Comcast and not E* and D* is just stupid. The two situations are very different.

[JohnL]

Originally posted by AJ2086
When will he give up! DOJ and FCC have given him a no. Its not going to happen. And the ATT-Comcast Merger does not create a monopoly. In most areas only one cable provider is available so its not going to limit the choice they have, the people in that area will be able to choose cable, D* or E* or CBand. But if you merge E* and D* you have no competition. So Charlie crying that they merged ATT and Comcast and not E* and D* is just stupid. The two situations are very different.

I really don't understand the anti competitiveness stipulation of the rulings. DBS's competition is not really each other but Cable as Cable now holds 80 percent of the Multichannel marketplace.

Since most large markets have now switched to optical fiber as their backbones most cable systems bandwidth is about 80 percent of Dish or DirecTV's total bandwidth and Dish and DirecTV are held to must carry in all covered local markets and are being pushed to carry more and more local markets OTA channels, and that doesn't even give any bandwidth to HDTV services that are the future of TV in this country.

Without the merger Rural America we be banished to low bandwidth hell with no Internet Broadband service and no chance of their local market locals or HDTV.

If DirecTV by Echostar has to compete in each market with every single local franchise Cable Company and they maintain ONE national Rate card then where is the harm, since in effect this deal would make every local franchise in the entire country a competitive force in each and every market, for price and quality of service.

Oooh now I get it the harm is the individual cable companies bottomlines as well as the OTA's monopolistic distribution practices. The only real harm in this whole deal is to the established monopoly's that the government created in the first place. So the government won't allow another entity to compete against these other entities to help drive innovation and cheaper prices for service. Sounds to me that the DOJ and FCC are just the lap dogs of the corporate elite and won't allow any competition to happen, for the benefit of rural America as well as everybody else.

John

[dlsnyder]

My understanding is that the anti-competitive concern here is for rural subscribers with no cable access. Their choices would be reduced from two satellite companies to one. I am at a loss though as to why the small minority of rural subs with no cable access were considered to be in more danger of harm by this merger. With two DBS companies duplicating programming across all of the CONUS slots there is virtually no chance that rural subs will see their locals carried. With a single DBS carrier covering all CONUS slots there is at least the promise and the technological possibility that all DMAs nationwide would be carried, creating a truly competetive alternative to cable. It seems to me that the real problem here is Charlie. I wonder if the tables were turned and it was GMH merging with Echostar with Charlie walking away at the end, would DOJ have approved it?

Now we may never know.

[Taz]

I have emailed Dish Network several times to see when my locals might be added and everyone of the replys I got back stated that since the EchoStar 7 & 8 satellites went up they were planning on adding about 30 more cities. it stated in the reply emails from dish network that they have 47 markets up and plan to add around 30 more. so today I was reading on the Dish Network Channel Chart.com page under the (Swiki Echostar Home Page) that Charlie Ergen stated today in his chat with the retailers that they were adding two more cities, Buffalo & Des Moines and that would be the maximum locals that could be added without the merger. making it to be 51 cities with locals to be offered by dish. he stated with the echostar 8 he may be able to add a couple more cities. so my question is.... What happen to the 30 more cities they were going to add? because they haven't added but 7 or 8 cities have they since the echostar 8 went up? and in all the replys from dish and from the charlie chats my understanding was with the echostar 7 & 8 satellite's they would have a lot more room to add a lot more locals. so can someone tell me what happen?

[Mike123abc]

Adding locals is not a simple process and takes lots of time. An agreement has to be reached with all the stations in the market, then a way to recieve all the signals (PoP - point of presence) has to be set up, tons of equipment needs to be put in to process the signals, and fibre lines have to be used to feed it to the Dish uplink center. They also have to hire people to man the PoP or hire a third party company to manage it for them. One market a month seems to be the rate they have been going.

Another issue is the undying fantasy of a merger... they are not adding cites fast in case they get a merger.

Once merger is killed off, dish will probably add 20 or so more cities fairly fast... going up to about 80 (they filed with the FCC in merger documents that they would do about 80 cities without a merger). Even then I would not expect to see more than 3 cities a month as the engineers have to run around the country to set these up.

[platinum]

There wont be a merger.

[normang]

ATT & Comcast merely merge two smaller monopolies into one. They already have crappy service, mediocre PQ if you are still on cable, rising rates, (which of course will go up even for Satellite, its inevitable)

The Dish-DTV merger would have been a great benefit as I see it. The concerns raised were unsubstantiated. The FCC is doing a terrible job and may ruin broadcast TV as we know it unless they get their act together. They've almost ruined the telecomm industry.. whats next..

[platinum]

The is no great benefit of having Charlie Ergen controlling the entire satellite biz. How can you say the concerns raised are unsubstantiated? Have you gone to the FCC site and read anything?