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Was pro merger now converting to con merger

Discussion in 'General Satellite Discussion' started by Mike123abc, Aug 5, 2002.

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  1. Aug 5, 2002 #1 of 23
    Mike123abc

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    Well at first when I heard about the merger I was excited. I was thinking of all the advantages a merger would bring to the world of DBS. After watching events unfold, I am now on the fence, but leaning towards not liking the merger any more.

    So, the question comes up, why do we need the merger:

    1. Will provide local TV to all DMAs.

    Well this sounds like a noble goal. After thinking about it for a while, I wonder why this is even important? Independent they will probalby cover the top 75 markets (I know they say 50 is all they can do, but E* especially with "wing" sattellites could easily do 100, maybe even 125+ if they put a spot satellite on one of the "wing" satellites). If they used 5 transponders on 61 and 5 on 148 to do east and west US, they probably could even go to 150+ markets. Actually with the 35 transponders they have on the "wing" satellites they could do ALL dmas, but it is not really profitable for them to do it.

    The Top 75 markets is 78.2% of the population.

    But, the question comes up, why would I like to have locals on DBS? The PQ is 100x better over the air. Even basic cable is about the same as DBS. Soon my market will go to HDTV. This will be 1000x better than DBS, and DBS has no plans for HDTV at all... mayb just 12 national stations. If I am unable to recieve locals OTA (as with some stations in my market, since they are not even transmitted WB, PBS, etc) I can buy distants/superstions. Many of the smallest DMAs only have one or two channels and would have to have distants anyways. With 78% of the nation able to get DBS locals, and the rest would probably need some distants anyways.

    2. Able to provide nationwide broadband internet connections. Well the service already exists without the merger, I do not see how a combined company can really improve on this.

    3. Unified national pricing. Well this is probably not a good thing. With competition they will fight with low prices. Yes, in some markets they might have a lower price than national rates for various reasons, this does not raise national prices. There has been a good history of minimal price increases anyways. With only one company they could do like the cable companies and raise prices every year. Yes they may still be lower than cable, but in my case they are 40%+ lower than cable. Making one company with 20% below cable just raises prices for everyone equally.

    4. Able to add the latest technology like 8PSK to increase variety and add HDTV. Well, last I looked E* was going to pay 26 billion for D*, this is about $2500/subscriber. They could instead use the money to update their own subscriber boxes, and satellites and end up with a great system and still have money left over.


    So, I have come to the conclusion that I will not really gain anything from the merger (besides LIL of dubious value) but higher prices. Will I go back to cable? No way at this time, it costs more and delivers less. And even with the current quality levels of DBS, it still beats digital cable. Now if E* went up in price to close to cable and cable started carrying tons of HDTV, I would switch back very fast.

    I am sorry if E* does not want to work hard and win the DBS wars without taking over D*, but competition is what is needed. In reality with what E* currently has they should be able to trounce D* without trouble. D* has 46 national transponders, E* has 50 national and 35 "wing" satellites (essentially each can do about 3/4 of the US).
     
  2. Aug 5, 2002 #2 of 23
    mnassour

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    OK, what the heck...let's play devil's advocate here:D .....

    1. Will provide local TV to all DMAs.
    After thinking about it for a while, I wonder why this is even important...

    >>Because people outside of Glendive Montana deserve network television just as much as do those in New York City. With all due respect, this is an argument that people NOT in the top 75 markets are REALLY tired of hearing.

    2. Able to provide nationwide broadband internet connections. Well the service already exists without the merger, I do not see how a combined company can really improve on this.

    >>>Yes, but the two are demonstrating that they can't make money at it. Frankly, I think nationwide broadband via satellite is a money-loser at ANY level. But if it's made a REQUIREMENT of a merger at a REGULATED rate, then the combined company would be forced to offer it.

    3. Unified national pricing. Well this is probably not a good thing. With competition they will fight with low prices.

    >>>Like they're fighting now? Package for package they're within fifty cents a month of each other, unless you're unlucky enough to have to buy DirecTV from Pegasus.

    4. Able to add the latest technology like 8PSK to increase variety and add HDTV. Well, last I looked E* was going to pay 26 billion for D*, this is about $2500/subscriber. They could instead use the money to update their own subscriber boxes, and satellites and end up with a great system and still have money left over.

    >>>>But they won't. If they're spending $2500 per sub, then they're going to want a return a LOT greater than than $12/month additional anyone's likely to pay for a HDTV feed.

    Just a few points to ponder.......
    :)
     
  3. Aug 5, 2002 #3 of 23
    Richard King

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    NAB and FCC would have fits if they tried this after what they have been through temporarily putting some stations there.
    If it's not profitable they won't do it.
    You just hit on one of the big problems. People don't look beyond their own area when analyzing the situation and assume that their situation is the same over the whole country. Pictures with an off air antenna may be fine for you, but I (and all in my area) get only marginal pictures on ABC and Fox with an off air antenna and ZIP on NBC and CBS with an off air.
    Once again, look beyond your area. My chances of getting any HDTV over air here are slim at best.
    One of the two companies is in bankruptcy, the other, not anywhere near profitability, will probably drop the service if the merger and consolidation of assets doesn't happen. DirecTv also has a DSL company that they are seriously considering closing down or selling due to losses.
    Pricing will be determined by the competition between DBS and the lowest cost large city cable company. National pricing will be based on this competition. The whole country gets the benefits of this "big city" competition.
    This shows a total and complete lack of understanding of the merger (and business in general).
    You propose that they use $26Billion to upgrade existing subs and systems? The merger is a combination stock and cash deal (currently valued at about $16Billion). Most of the cost of the transaction is in a stock swap. If they were to attempt to spend $26Billion in upgrading existing subs what would they have to show for it? Nothing more than what they have today in the way of subscribers. Additionally, they would have very large bills from their legal team handling the bankruptcy proceedings. The $26Billion (now 16Billion) transaction is justified only by the acquisition of new subs and cost savings that would happen post merger.
     
  4. Aug 5, 2002 #4 of 23
    jrjcd

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    keep in mind that charlie is the master of lies and misinformation and just because he SAYS he will service and PROMISES it will be one of his primary goals, doesn't mean he WILL do it(in fact, history indicates that the opposite is true)...
     
  5. Aug 5, 2002 #5 of 23
    Mike123abc

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    I do not live in a top 75 market. In fact my market is around 140. It does not have all the networks broadcasting locally. PBS is a weak repeater out of Dallas, WB is not on the air at all, and UPN is a 1000 watt transmitter that is essentally a way to force it on must carry.

    I recieve UPN/WB/PBS on Echostar right now via the Superstations and National feeds.

    My parents live in even a smaller market. They have one station CBS and one station that does a combination of CBS/ABC/FOX, essentially whatever they think is the most popular show showing at the time. They do not really want LIL for 2 stations. They want distant nets/adjoining markets. They cannot get distants for CBS or ABC because of the "locals", while the CBS station has the full network stream, they only get 50% or less of the ABC feed, and have no alternative.

    If you cannot recieve over the air stations, are you really in that television market? If they say a 500 mile circle around a city is the market and you cannot recieve the signal out past 75 miles are you really getting local television service at all. The problem with Locals vs. distants is the NAB giving huge swatches of territories to stations out west and fighting tooth and nail to block people who try to recieve distant markets. Are you really going to be happy to get your 2 "local" stations from E*? The fact is that the small markets will end up paying for locals, some distants, and superstations. Large markets will only have to pay for locals, national pricing is $10+ a month higher in small markets.

    The question is are you managing to get by without locals on your DBS service now? If you are able to do so, how will LIL really make your life better.

    As far as lack of understanding of the merger (and business in general as mentioned above) I see a company that is heavily in debt that needs to spend billions on capital improvements. How will this lead to lower prices? How will this lead to a healthier DBS system? Only one thing can happen is higher prices. If they are force to do national broadband they will have to raise prices even more to suppliment the money losing operation.

    Satellite Internet fails because people do not want to wait for a signal to bounce off a satellite a couple times to get to them (once up and back for your packet going out, once up and back for the reply... over half a second delay on top of any other internet delay). So, only people that have no other choice have to pick it.

    As mentioned above the two current satellite operators are withing 50 cents of eachother on packages. This is because of competition. When one provider comes out with a deal the other one tries to match it or offer something better. If cable is 40% higher and the only other competition, what keeps the new combined monopoly from raising prices up to 20 or 15% under cable. Yes it is still cheaper than cable, but still far above what they charge now.
     
  6. Aug 5, 2002 #6 of 23
    James_F

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    I don't know, I'd think locals are really only important to people with PVRs and have had cable. I've never in my life received OTA channels until I got a HDTV. That said, we put off getting DirecTV until locals were offered in Phoenix...

    My inlaws live in a place called Brownwood, Texas. They don't get locals and really don't care. The national feeds of the network is all they want.

    Now in medium markets, which have good quality locals, I'm sure there is a huge market for them. I just have no experience without them, and wouldn't have DBS without them.
     
  7. Aug 5, 2002 #7 of 23
    AllieVi

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    If the new company agrees to such a requirement, the money lost on the enterprise will have to be made up somewhere else. Guess where that would probably be...

    Satellite broadband is simply not the same animal as DBS and the economics of it may never allow the rates people predicted a couple years ago (about $40/mo). Charlie has lost money on two different broadband approaches (StarBand and WildBlue) that I'm sure he expected to succeed. I don't believe that the third time will be a charm.
     
  8. Aug 5, 2002 #8 of 23
    Richard King

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    According to the listings at: http://www.tvradioworld.com/region1/tx/tv_information.asp?m=wic
    you have over the air access to a local NBC, CBS, Fox, PBS (repeater), UPN, and a second PBS (repeater). Sure wish I had your variety here. If I did I might not need locals over satellite either. Since ABC comes out of Lawton, OK, I suspect it will be your local ABC and included in your local package when it goes on the bird.
    Feel free to compare that to my local stations: http://www.tvradioworld.com/region1/fl/tv_information.asp?m=ftp
    Talk about a television wasteland. :lol:
    Actually, I get all the locals from my DMA (West Palm Beach) from Dish now, including stations I could never have a prayer of receiving over the air.
    I had to spend about $15/month for my locals from AT&T cable. I prefer to get it by satellite for $5.99.
    Wrong. People don't want satellite internet because of the cost. The delay is only important in a few instances for very few people. If you are a real time gamer it is not for you. If you are doing voice over internet it is not for you. If you want to maintain web sites it is not for you. It is fine for 90% out there, other than pricing. I know because I am a Starband dealer and I am posting this (and all my previous posts) using Starband.
     
  9. Aug 5, 2002 #9 of 23
    jrjcd

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    james-my wife graduated from howard payne...

    well, as a dealer, all i can say is we sold better when we didn't have locals and had more of a say in pricing the labor...

    i hate free free everything...
     
  10. Mike123abc

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    I guess my main argument is if 80% of the country should suffer from a monopoly to service the 20% that do not live in a market that would be served by DBS locals? Even then that 20% is misleading since many in these markets do have an alternative. Some have OTA, some have cable, some have access to distants because they live in white areas. So, it is probably less than 5% of households that would see a benefit from the merger, if they happened to also subscribe to DBS. The list of people that have direct benefit from the merger is very small. Not all products and services are available everywhere in the US, people sell products and services where they can make money.
     
  11. toomuchtv

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    As I've posted here before, I prefer distant nets over the locals I would receive. We have Charter cable here & I think they actually offer more programming for less, or close to the same amount, as E*. My internet access (dial-up) isn't great but is good value for the price I pay. I'm not sure I'd care to pay twice as much for the service to gain a little speed. The lag time will be too great for gaming & that would be my son's main interest. On the technology side, E* will continue to make improvements, as long as they can stick a hefty price tag on it & get people to pay up. If the merger happens - so be it. However, I'm not sure we'll see any REAL benefits from it. If I had D*, I'd strongly oppose it .
     
  12. Karl Foster

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    I am opposed for a couple of reasons, and none of them are due to programming issues:

    1. Lack of competition.

    We have had many mergers of utilities in our area, Qwest, AT&T Broadband, Scottish Power, Questar Gas, etc. My utility bills have increased at a faster rate than the rate of inflation. The worst has been AT&T Broadband. Our area still doesn't have digital cable, or cable Inernet access. With a lack of competition in the cable market, AT&T can do what they want. I fear the same will be true with the new E*. Where am I to go if the new E* doesn't provide the service I want? I fear a loss of value for my dollar spent.

    2. Equipment equipment equipment.

    This reason is totally selfish. I have been very pleased with my RCA equipment, especially my two UTV receivers. I am leary of what they will be replaced with. I have a suspicion that the new E* will try to replace D*Tivo and UTV units with 501/508 series PVRs. They don't hold a candle to the UTV or D*Tivo.

    With no competition from other DBS providers, who will keep the new E* on their toes to develop new products? I fear the technology will stagnate.

    These are two of my reasons for opposing the merger. There are others, but others have stated them in this discussion already.
     
  13. tampa8

    tampa8 Godfather/Supporter

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    The argument that it will decrease competition within DBS is, in my opinion one of the only true downsides of the proposed merger. For DBS to compete with cable in the future, I think it does makes sense. But when I see posters say that Charlie has lied to us before etc.. well I'll be polite to the other posters and only say Charlie is an easy target because he has made an attempt at customer service. Dishplayer owners (I'm not one) have a very real beef with Dish. Others however seem to have been given at least some consideration when wanting to upgrade. The Charlie Chats and getting a response to emails from his office are at least an attempt to listen to the consumer and a far cry from many businesses, especially our area Cable. I also am surprised at how many keep saying locals are not needed on DBS. In a very casual survey of my friends, most all want to get DBS because it is much cheaper with more choice than Charter Cable, but not until the locals are available. We can't get most locals with a good signal here with an antenna. I do understand C Band and early DBS weren't about locals, but to flourish and survive it is a must. There are also many (most?) who do not want to have to "switch between" anything to watch TV, they want it seemless. The posters who talk about the merger being a complicated business transaction are correct. We tend to simplify how business works. Also, that spending millions on a current subscriber base doesn't make sense is 100% correct. It's about improving your product (if you want to stay in business) thru expansion. More income allows more improvements especially if more capital outlay isn't excessive. Adding more subscribers to use already existing or to planned equipment is the exact scenerio to improve service. Will a merged company do the improvements? No guarantee, I say probably. Can they if not merged? Not as likely.
     
  14. Frapp

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    Although you may be in the minority here, the government will agree with you.

    There is no way ... NO WAY .. they will allow a monopoly to happen as obvious as this one is ... as they should not !
     
  15. jrjcd

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    here's hoping the feds make the RIGHT decision...and strike down the merger...
     
  16. AllieVi

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    Other competitors are expected to offer DBS service in the next couple years. When more than the current two providers exist, a merger of a couple of them may be acceptable, but I believe that allowing a single company to (essentially) dominate the entire DBS industry now would be a mistake. New companies will help vitalize the industry, but a merged E*/D* would be so entrenched that new providers would have little chance of success - they may even choose to not enter the market. I want them to succeed so that we have more than one DBS company. There's no hurry - the merger can wait.
     
  17. Chris Freeland

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    I agree with Tampa8, he put it very well on why I am also in-favor of the merger, DBS needs the extra bandwidth to succeed in competing with cable in the future.

    I for one would love to have my locals on DBS and I suspect that the merger is the only way Chattanooga will get them on DBS. I am getting tired of having to run outside to adjust my antenna evrytime the wind blows, even when it is properly aimed I only receive a watchable picture on my Big 3 stations plus a local class 'A' 3ABN channel, I can not get my local Fox channel at all and FOX61 will not give me a waiver. I suspect that in the smaller markets that do not have a full slate of Big 4 and PBS stations will receive either a neighboring DMA's network channel(s) or a distant Net(s)to feel in the blanks. However I suspect the smaller markets might have to order Supers to receive WB and or UPN.

    One of the reasons that E* and D* need to merge to stay competitive with cable is in most markets cable still holds around %80 of the market. I also do not agree that a merged E*/D* would be too entrenched to keep other multi-channel providers from entering the market and competing with both cable and E*/D, if this were the case E* and D* would have never survived the cable competition today, talk about entrenched. If a new Multi-channel provider enters the market with good programing packages at a good price, they will have no trouble competing, even with a cable and a strong E*/D*.
     
  18. DarrellP

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    Regarding Locals PQ: I live in the Portland, OR DMA (top 29) and have a Dish 6000 and receive 6 digital channels OTA & 4 of them are High Definition. Our locals just went to spotbeam and they look darned good. Just as good as any of the premium movie channels.

    Last night I was comparing the Dish locals we get to a OTA Standard Def channel and there was little difference. Dish is a bit softer but still looks quite good, much better than I can get via an antenna with the old Analog channels.

    All I can say about the merger is: Bring it on and bring me more HD!
     
  19. AllieVi

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    Cable has the lion's share of the market simply because it's been in existence much longer. The DBS companies are growing at a healthy rate and the latest figures I've seen show cable stagnating.

    About entrenchment: The cost of launching enough satellites and building ground equipment to match what will be the merged company's capabilities will probably bankrupt any company that tries. Both E* and D* entered the business with (by today's standards) a small number of satellites and channels. They were each able to grow over time to their current capabilities. Any new company entering business today would have to initiate service with at least as many channels or significantly lower cost to gain customers. In either case, the economics of the business will make profitability difficult. Successfully matching the merged company's capabilities will probably be impossible.
     
  20. Mike123abc

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    This is why most cities only have one cable provider. Cable is not an exclusive right in most cities. But, the cost of rolling out a new cable system is so high that the one that started 30 years ago has an effective monopoly.

    R/L DBS claims to want to compete, so does SES, but how much market share can they really hope to get against a combined E/D*? Why would you want to switch to a new company that only has 50 channels and LIL in only some markets? They need ongoing cash flow to afford to build more satellites and offer more channels. E/D* could easily put together a 50 channel package to match their package, and just hold out long enough to bankrupt them.
     
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