Commission Details DBS Merger Rejection
On Friday, the Federal Communications Commission released the formal order outlining its rejection of the proposed merger between EchoStar and DirecTV, a document detailing the uphill battle the companies encountered - and may still face - in addressing how a combined satellite TV entity may have negatively impacted multichannel competition.
The FCC went public with its DBS merger decision on Oct. 10. In the 127-page order released last week, the FCC said, "there appears to be a substantial likelihood that the proposed merger will significantly increase concentration in an already concentrated (multichannel TV) market, that barriers to entry into this market are high, and that the proposed merger will therefore have a significant adverse effect on competition."
Among the specific concerns listed by the FCC was that the merged company would've controlled all full-CONUS DBS orbital slots. The FCC also said in its order that it was unlikely new competition would surface to take on the combined satellite TV powerhouse within two years, the required time for a new entry to come to market with a competitive offering.
The order addressed proposals from Cablevision and SES Americom to provide that competition. In the section addressing Cablevision's proposed Rainbow DBS satellite TV platform, which aims to compete in the small dish business, the FCC said it's highly unlikely the company could roll out "this new service and acquire a significant customer base sufficient to off-set the likely competitive harms of the proposed merger within two years.
"There are simply too many uncertainties associated with the launch of a new satellite, operation of associated ground facilities, acquisition of distribution agreements with local equipment retailers and installers, and deployment of a new DBS service to assume that Rainbow DBS could have a significant competitive impact within the relevant two-year timeframe," the FCC said.
From SkyReport (Used with Permission)
The FCC went public with its DBS merger decision on Oct. 10. In the 127-page order released last week, the FCC said, "there appears to be a substantial likelihood that the proposed merger will significantly increase concentration in an already concentrated (multichannel TV) market, that barriers to entry into this market are high, and that the proposed merger will therefore have a significant adverse effect on competition."
Among the specific concerns listed by the FCC was that the merged company would've controlled all full-CONUS DBS orbital slots. The FCC also said in its order that it was unlikely new competition would surface to take on the combined satellite TV powerhouse within two years, the required time for a new entry to come to market with a competitive offering.
The order addressed proposals from Cablevision and SES Americom to provide that competition. In the section addressing Cablevision's proposed Rainbow DBS satellite TV platform, which aims to compete in the small dish business, the FCC said it's highly unlikely the company could roll out "this new service and acquire a significant customer base sufficient to off-set the likely competitive harms of the proposed merger within two years.
"There are simply too many uncertainties associated with the launch of a new satellite, operation of associated ground facilities, acquisition of distribution agreements with local equipment retailers and installers, and deployment of a new DBS service to assume that Rainbow DBS could have a significant competitive impact within the relevant two-year timeframe," the FCC said.
From SkyReport (Used with Permission)
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