Steve Mehs
12-02-02, 03:50 AM
EchoStar and DirecTV parent Hughes Electronics submitted their amended merger proposal to the Federal Communications Commission, a revised application that's full of divestures to Cablevision's proposed DBS entity, Rainbow DBS.
In October, both the FCC and the Justice Department's antitrust staff said they would block the proposed EchoStar/DirecTV combination. But the FCC gave the companies until the end of November to submit a revised merger proposal.
Specifically, EchoStar and Hughes said they would divest EchoStar's 11 frequencies at the 61.5-degree slot to Rainbow. EchoStar also said it would assign to Rainbow its right to operate over 6 frequencies at the 61.5-degree orbital location that's under lease with Christian DBS operator Dominion - assuming that the lease arrangement permits assignment by EchoStar.
The companies also said they would divest 24 frequencies at the 148-degree slot, and EchoStar's temporary authority to operate additional frequencies at both locations. That would give Rainbow DBS 51 DBS frequencies at orbital locations not considered full-CONUS, or lacking full coverage of the entire United States. The slots would give the company coverage of the Eastern half and Western end of the country.
In addition, EchoStar said it would sell its EchoStar III satellite and lease its EchoStar I and EchoStar II birds to Rainbow DBS. The companies also said they would share with Rainbow backhaul facilities for local broadcasts, and give Rainbow the right to resell a merged company's full line of DBS services.
"Instead of a '3 to 2' or a '2 to 1,' this transaction will be a '3 to 3' or '2 to 2' in most areas of the country," EchoStar and Hughes said in the filing. "By virtue of the divesture proposal, which will strengthen Rainbow, consumers will benefit from a more powerful competitor than either EchoStar or DirecTV would be alone - a move from two spectrum-constrained providers that will be substantially strengthened compared to the status quo."
The merging companies also said Cablevision and Rainbow DBS will have the financial power to make satellite TV work, especially given the recent sale of Cablevision's Bravo network to NBC. "That transaction increases substantially the capital that could be available to Rainbow and should remove any remaining doubt that Rainbow's entry will become likely, timely and effective by virtue of the amended merger proposal," the petition said.
From SkyReport (http://www.skyreport.com/skyreport/dec2002/120202.shtm#one) (Used with Permission)
In October, both the FCC and the Justice Department's antitrust staff said they would block the proposed EchoStar/DirecTV combination. But the FCC gave the companies until the end of November to submit a revised merger proposal.
Specifically, EchoStar and Hughes said they would divest EchoStar's 11 frequencies at the 61.5-degree slot to Rainbow. EchoStar also said it would assign to Rainbow its right to operate over 6 frequencies at the 61.5-degree orbital location that's under lease with Christian DBS operator Dominion - assuming that the lease arrangement permits assignment by EchoStar.
The companies also said they would divest 24 frequencies at the 148-degree slot, and EchoStar's temporary authority to operate additional frequencies at both locations. That would give Rainbow DBS 51 DBS frequencies at orbital locations not considered full-CONUS, or lacking full coverage of the entire United States. The slots would give the company coverage of the Eastern half and Western end of the country.
In addition, EchoStar said it would sell its EchoStar III satellite and lease its EchoStar I and EchoStar II birds to Rainbow DBS. The companies also said they would share with Rainbow backhaul facilities for local broadcasts, and give Rainbow the right to resell a merged company's full line of DBS services.
"Instead of a '3 to 2' or a '2 to 1,' this transaction will be a '3 to 3' or '2 to 2' in most areas of the country," EchoStar and Hughes said in the filing. "By virtue of the divesture proposal, which will strengthen Rainbow, consumers will benefit from a more powerful competitor than either EchoStar or DirecTV would be alone - a move from two spectrum-constrained providers that will be substantially strengthened compared to the status quo."
The merging companies also said Cablevision and Rainbow DBS will have the financial power to make satellite TV work, especially given the recent sale of Cablevision's Bravo network to NBC. "That transaction increases substantially the capital that could be available to Rainbow and should remove any remaining doubt that Rainbow's entry will become likely, timely and effective by virtue of the amended merger proposal," the petition said.
From SkyReport (http://www.skyreport.com/skyreport/dec2002/120202.shtm#one) (Used with Permission)