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Those in charge at the Federal Communications Commission were for the most part united in their opposition to the proposed merger between EchoStar and DirecTV, with all four commissioners voting against the deal.

Specifically, the FCC declined to approve the transfer of licenses from EchoStar and Hughes Electronics, which controls DirecTV, to the merged entity. The FCC order also designated the application for a full evidentiary hearing before an Administrative Law Judge.

The FCC ruled that there was a likelihood the merger would harm competition in the multichannel video program distribution (MVPD) market, and that outweighed any benefits. Their biggest complaints about the merger: the elimination of an existing viable competitor in every market, the potential for higher prices and lower service quality, and the possible negative impacts on future innovation.

Said FCC Chairman Michael Powell, "The combination of EchoStar and DirecTV would have us replace a vibrant competitive market with a regulated monopoly. This flies in the face of three decades of communications policy that has sought ways to eliminate the need for regulation by fostering greater competition. I decline the invitation to turn our national communications policy back so many years."

Commissioner Kathleen Abernathy said business combinations in the multichannel market can be pro-consumer, "and it would be a mistake to equate bigness with badness," she said. However, "Our task is to review only the application in front of us and to weigh the potential benefits against the threats to competition. On this record, I am forced to conclude that the public interest would not be served by granting the application," Abernathy said.

Rural interests had a lot of complaints about the deal, Commissioner Michael Copps said. "Furthermore, it would be an enormous risk to approve a transaction that results, at best, in the merger of a duopoly into a monopoly in a critical sector of multichannel video programming," he said.

From SkyReport (Used with Permission)
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