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Guest Message by DevFuse

NEWS STORY: DBS Combo Tackles Regulatory, Rural Questions


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Posted 30 October 2001 - 06:24 AM


Executives with EchoStar, Hughes and its DirecTV unit insisted Monday that their unified DBS platform would become a stronger competitor to cable TV.

As for dominating rural areas, where cable has a lacking presence, both companies suggested that the National Rural Telecommunications Cooperative, which sells DirecTV in rural areas, may surface as an additional satellite TV competitor to their joint platform.

EchoStar CEO Charlie Ergen, who will lead the new DBS company, said once regulators see the positives a combined platform would create for rural TV viewers, they may warm up to the deal. "This is good for consumers, particularly in rural America," he said.

How that second competitor takes shape, and whether it will sell a competing DirecTV product next to the DirecTV/EchoStar combination, will be determined sometime in the future.

Both EchoStar and Hughes made the DBS/cable distinction immediately following the merger announcement. Even before the deal was made, EchoStar was promoting the proposed combination as a multichannel marketplace play rather than a satellite TV industry move.

As soon as the agreement was unveiled, the companies attempted to divert attention from the 16.7 million customers that would be covered under a joined EchoStar/DirecTV entity. Instead, the companies took out 1.8 million subscribers controlled by NRTC and its affiliates, leaving 14.9 million subscribers owned-and-operated by the combined company.

That makes the unified DBS platform the second biggest multichannel provider in the country, just short of AT&T Broadband's 15 million cable customers.

According to reports, executives behind the merger will present it to Billy Tauzin, Louisiana Republican and chairman of the House Energy and Commerce Committee, sometime today.

From <a href="http://www.skyreport.com" target=none>SkyReport</a> (Used with permission)


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