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Will DISH Accept Merger Concessions?
Posted 18 February 2002 - 02:25 PM
Both opponents and proponents of EchoStar's merger with DirecTV are considering whether the combined entity should adhere to certain concessions in order to get the deal done.
Suggestions that conditions should be placed on the $26 billion deal come as the Federal Communications Commission and the Justice Department continue to look at the transaction. EchoStar offered no comment on whether it's open to concessions, except those on price charged to consumers in both rural and urban areas, which is something the company said it can accept.
EchoStar and DirecTV parent Hughes said they will file on Feb. 25 their formal responses to comments on the merger that were sent to the FCC earlier in the month. "After the FCC reviews all the comments and examines all the facts involving spectrum efficiencies, rural access to broadband, nationwide pricing, increased local channels offerings and other benefits for the American public, we are confident that the FCC will find that the pending merger is in the public interest," an EchoStar spokesperson said.
One of the more interesting concession ideas floated by the Consumers Union is requiring a combined EchoStar/DirecTV entity to provide open access for competitive Internet service providers through its combined broadband satellite offering. Open access to broadband services has been a hot item or cable. While there are no specific regulations in place, open access was one of the conditions placed on the merger between AOL and Time Warner.
A big concession could be price. EchoStar has said that it will offer consumers both in rural areas and in cities the same prices for service. But the Consumers Union and others said they want more of an enforceable guarantee that the combined company will offer the same terms and prices at the point of sale in rural markets as well as metropolitan areas.
"Our fear is that once one of two multichannel options for rural subscribers is eliminated, the remaining company will be free to eliminate equipment subsidies and raise prices for service above levels in urban markets where the satellite company must still compete with cable," the Consumers Union told the FCC.
The State of Alaska also asked the FCC to require a combined satellite TV entity to offer the same prices and conditions to its citizens that are charged to consumers in the lower 48 states.
Another condition floated at the commission was the divestiture of orbital slots, satellites, and transponder capacity. The Consumers Union endorsed this proposal, and the divesture of orbital slots was one of the suggestions made by WSNet, a Texas-based provider of digital video to multi-dwelling units and small cable operators.
Merger attorneys said they wouldn't agree to the divesture of DBS orbital slots. One lawyer said that move would "wreak tremendous havoc on the synergies of this transaction."
Finally, the Consumers Union asked the FCC to license the spectrum-sharing service proposed by Northpoint Technology. (In its comments on the merger, Northpoint also asked for the same thing.) Satellite interests have been vigorously fighting Northpoint and the wireless spectrum-sharing effort, concerned that technology sharing DBS spectrum will interfere with satellite signals.
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Posted 19 February 2002 - 11:36 AM
I can see the Internet access argument, but divestiture of orbital slots? That would kill the entire reason for merging.... I hope that doesn't come to pass.
Posted 19 February 2002 - 11:55 AM
One condition I would like to see set is the ability of at least 5 channels set aside for some sort of National Public Access. CableTV is required to do it, so why should satellite not have to do it.
Some of the most interesting things I have seen on TV have been off of public access.
Of course this Public Access would be run differently, shows would be submitted and aired on a first come first served basis. Shows would have to meet certain technical guidelines. And shows would only be eligable to run for a certain length of time.
I would love to see that.
Posted 20 February 2002 - 08:14 PM
Forcing them to get rid of the additonal reciever fee would be nice. There is no competiton now they wont do it