EchoStar/DirecTV Deal May Not Be Dead - Enter Cablevision Print E-mail
Monday, 28 October 2002
The Washington Post is reporting that EchoStar, parent of Dish Network, isn’t giving up after being dealt a crushing loss this month by the FCC, which rejected EchoStar's $18 billon bid for GM’s DirecTV.

Addressing concerns that if EchoStar is allowed to merge with DirecTV, there would be no satellite competition for the U.S. consumer, the Washington Post says that EchoStar has crafted a deal whereby they will sell and/or lease part of their bandwidth to Cablevision’s satellite company, Rainbow DBS.

The plan may be plausible. It would put EchoStar and DirecTV be way out in front in terms of subscribers, yet consumers would retain the ability to have a satellite option other than the new consolidated DirecTV, which would include Dish Network’s subscribers.

It is hard to tell what the FCC will do with the renewed bid. However, there is a model for this type of deal to be found in the 1996 consolidation of radio station ownership. When companies like Infinity Broadcasting and Clear Channel bought up every good station in every major market in the U.S., in some cases, they were forced to sell off excess stations to appease the FCC even with the new, more liberal rules. Did it keep them from creating a monopoly in radio? Some critics say no, but the world of satellite TV makes up only 20 percent of U.S. television delivery. Cable broadcasters supply programming to the vast majority of the TV-viewing audience, so the FCC's fears of monopolies in the satellite TV arena should be lessened.

Source: The Washington Post,

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