In an apparent response to critics of his proposed merger with Hughes
Electronics Corp., EchoStar Communications Corp. CEO Charlie Ergen said Tuesday
that the combined company will offer local TV signals in every market in the
'We can't be competitive to cable until we can provide local signals to all
Americans,' said Eddy Hartenstein, chairman of DirecTV Inc.
'If this merger is approved, we're going to do this,' Ergen said. 'It's a
good business for us.'
Neither Ergen nor Hartenstein would respond directly to questions asking if the announcement was politically
Instead, they said it was something they will do even if the government does
not require it as part of any merger proposal.
The merged company would charge all U.S. consumers the same rate for local TV
signals no matter where they might live under a plan Ergen calls 'one nation,
one rate card.'
The plan, laid out by EchoStar and Hughes, would require the combined company
to use the two spot-beam satellites they have already launched, two additional
spot-beam satellites they plan to launch and one additional spot-beam satellite,
which will cost the combined company $300 million-plus, Hartenstein said.
Those satellites cover the entire country using full continental U.S. (CONUS)
spectrum. There are a fixed amount of CONUS slots, and only EchoStar and DirecTV
have licenses to use that spectrum.
The company could have the new satellite up and running with all local TV
signals available within two years of the merger's approval, the executives
Ergen and Hartenstein said full satellite coverage of all local TV markets is
only possible if the merger is approved. 'This makes sense only because we have
the spectrum to do it,' he added.
Carrying all 1,650 local TV stations will take up approximately 30 percent of
the combined company's satellite spectrum, Hartenstein said.
The announcement didn't appear to substantially quell any of EchoStar's and
Hughes' major opposition. While broadcasters were interested in the proposal,
they remained skeptical of Ergen.
'Today's announcement appears to be a step in the right direction, but it
needs to be carefully scrutinized to determine its legitimacy,' National
Association of Broadcasters president Eddie Fritts said.
'We would have more confidence in the announcement were DirecTV
to be the surviving entity,' he added.
'Broadcasters have had a long and tortured history of bad-faith dealings with
EchoStar and its chairman, Charlie Ergen. Accordingly, we continue to oppose the
Ergen and Hartenstein said Tuesday morning that they had not yet run the plan
by broadcasters but they planned to do so as soon as possible.
'We believe today's announcement came as a direct result of the ongoing
efforts of the NRTC, our members, the Rural Caucus, the Western Caucus,
influential rural-focused organizations and outspoken rural consumers,' National
Rural Telecommunications Cooperative president and CEO Bob Phillips said.
'We must, however, continue to push to ensure that they
address the other serious shortcomings in their merger application,' he