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A diverse mix of comments surfaced soon after the Federal Communications Commission rejected the proposed merger between EchoStar and DirecTV late last week.

Edward Fritts, president of the National Association of Broadcasters, applauded the FCC decision. "From the outset, NAB's primary goal has been to extend satellite carriage of every local television station in all 210 markets in America as quickly as possible. We agree with the commission's finding that a competitive satellite marketplace will help reach that goal far faster than through a single monopoly provider," he said.

However, Marc Rhoads, vice president of the United States Internet Council, expressed disappointment that the FCC didn't work harder toward a compromise on the merger. "One of our key goals is to help make broadband services affordable and available to the greatest number of Americans," he said., The decision "is a setback to that goal. We hope that a compromise can be reached whereby the FCC will not let the opportunities represented by the EchoStar/DirecTV merger slip away from the public."

As for Wall Street, Armand Musey of Salomon Smith Barney said the tone of the FCC rejection announcement was "overwhelmingly negative, which we believe means the deal is effectively dead." Musey added that it's certain EchoStar will "exhaust all possible means before throwing in the towel."

Musey also said EchoStar will likely challenge its termination agreement with DirecTV's parent Hughes Electronics. "Ultimately, we believe EchoStar will be forced to settle with Hughes and purchase PanAmSat, leaving, we believe, Hughes with a more attractive capital structure," he said. "However, challenge of the termination agreement would hold-up GM's ability to pursue alternative transactions and could force a concession."

FromSkyReport (Used with Permission)
 
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