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The CEOs for EchoStar and DirecTV met with members of the Senate Antitrust Subcommittee Wednesday, and were given a somewhat chilly response to their $26 billion proposal to merge operations.

Senators on the panel didn't voice outright opposition to the deal, which if completed would combine the No. 1 and No. 2 satellite platforms serving the United States. But they openly scrutinized the plan and the possible effects it could have on rural TV viewers.

"You are saying, in order to increase competition, we need to decrease competition," said Sen. Mike DeWine, ranking Republican on the subcommittee. "Maybe this is true and maybe this is not."

Utah Sen. Orrin Hatch pointed out that the combined satellite TV entity would control all full-CONUS DBS slots. "This sort of merger, combining both remaining competitors in a market and leaving no avenue of entry into that market, raises a lot of vexing competition policy questions," the Republican said.

"I am concerned for the success of the DBS business as a competitive force for the benefit of television viewers, broadband Internet subscribers and creative content developers who need distribution choices to deliver the goods and services to consumers," he added.

But the CEOs said the merger will bring more competition to cable, with the expansion of local TV channels into all TV markets in the United States, satellite broadband access and a national pricing plan, in which rural customers pay the same as city TV viewers.

"There are the digital 'haves' who are located primarily in the major metropolitan areas," said Charlie Ergen, chairman and CEO of EchoStar. "But in rural America today, there's what I like to call a 'no-opoly.' Nobody, not the cable companies, not the phone companies, is providing broadband service."

Ergen was joined on the panel by DirecTV Chairman and CEO Eddy Hartenstein, who reminded senators that cable "is clearly the dominant provider," and is serving most of the pay-TV market. Also testifying were Eddie Fritts of the National Association of Broadcasters and Gene Kimmelman of the Consumers Union.

Missouri Attorney General Jay Nixon testified against the merger, and said that "dozens of state attorneys general" have been in contact with his office on their merger concerns.

From SkyReport (Used with permission)
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