CU: DBS Combination Key for Locals

Gene Kimmelman, senior director for Public Policy and Advocacy at the Consumers Union, said a merger of the two dominant satellite TV providers raised concerns, but the combination could have been structured in a way that actually helped consumers by making the dish a legitimate competitor to cable TV.

"Cable companies have a monopolistic grip on the vast majority of communities in America. Satellite companies haven't been able to compete head-to-head with cable because they cannot offer local TV channels in many places," Kimmelman said.

The Consumers Union leader pointed out one of the top selling points of the merger from the companies: The combination would have freed up enough spectrum for a merged entity to offer local channels across the country.

"But the FCC ... opted for the more narrow-minded route and voted to block the merger," Kimmleman said. "It's hard to understand how the FCC thinks that it's helping consumers by blocking, rather than restructuring, this deal. It was bad enough for consumers when Congress deregulated cable monopolies and allowed rates to skyrocket. But for regulators and antitrust officials to hinder efforts to make satellite more competitive with cable simply adds insult to injury."

Kimmelman said cable rates have shot up 45 percent in the six years since Congress approved the Telecommunications Act, which initiated deregulation. And he said that as separate entities EchoStar and DirecTV have not been able to discipline cable rates in most communities.

From SkyReport (Used with Permission)