|Justice Department Frowning on DIRECTV and Echostar Merger|
|Home Theater News Industry-Trade News|
|Written by Jerry Del Colliano|
|Wednesday, 25 September 2002|
Justice Department Frowning on DIRECTV and Echostar Merger Could Mean Setback For DSS HDTV
CNN and other news agencies are reporting that staff in the U.S. Justice Department are not in favor of the pending merger of the two top digital satellite TV manufacturers – GM’s DIRECTV and Echostar’s Dish Network. The reason for the lack of support for the merger is reportedly that there are only two competitors in the DSS market and the deal will leave people who can’t get cable or terrestrial TV with only one satellite TV option. Echostar and GM argue that cable TV companies own over 80 percent of the pay TV market and merging is the best way for them to compete.
If the deal is nixed by the Justice Department the short term losers will be early adopters to HDTV who are desperate for more HDTV programming. Combining the two DSS networks would result in extra bandwidth which would allow more traditional along with more HDTV channels for subscribers of the new DIRECTV.
Other factors possibly weighing in on the Justice Department could be the fact that Rupert Murdoch’s News Corporation, the parent company of Fox, showed interest in DIRECTV but lost out in the bidding. A different deal with News Corp. would leave two options for consumers but might delay the growth in channels for HDTV users.