Uncertainty Builds Around DBS Merger

Is there gonna be a DBS merger?

Uncertainty as to whether DirecTV and EchoStar will be allowed to combine operations surfaced Tuesday after the New York Times reported that staff with the Justice Department's antitrust division recommended that regulators block the proposed merger. Personnel based the recommendation on the grounds that the proposed combination would be anti-competitive, the paper reported.

The merging companies dismissed the Times story. "As we have said all along, we continue to provide the DOJ and FCC (Federal Communications Commission) with information about the merger. We are not engaging in any premature speculation," EchoStar spokesman Marc Lumpkin said.

EchoStar wants to buy DirecTV and Hughes Electronics from parent General Motors.

Wire services quoted GM spokesperson Toni Simonetti as saying the news reports are part of a media campaign being waged by the deal's opponents. "We still believe that the merits of our case are strong, and that the Department of Justice is evaluating the case on its merits and not all the political noise from our opponents," Simonetti said.

The New York Times cited attorneys saying that personnel with the antitrust division are opposed to the deal since it would reduce competition from three companies - two satellite TV providers and a cable TV company - to two. In rural areas, competition would be eliminated.

Meanwhile, the Wall Street Journal reported that EchoStar Chairman Charlie Ergen will meet with Federal Communications Commission staff today to head off opposition to the proposed merger.

From SkyReport (Used with Permission)