Ergen attempts to keep merger hopes alive

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EchoStar Communications Corp. chairman Charlie Ergen met with Department of Justice officials Monday in a last-ditch
attempt to salvage his company's proposed takeover of DirecTV Inc.,
laying out his plan to help Cablevision Systems Corp. create a new direct-broadcast satellite company in order to
allay regulators' antitrust fears.

The DOJ is widely expected to follow the lead of the Federal Communications
Commission and reject the merger because it
would eliminate competition by shrinking the DBS business from two players to
just one.

Ergen's proposal goes much further than he had initially hinted three weeks
ago. He proposed bolstering Cablevision's decade-long effort to start a DBS
service by transferring satellite frequencies in the same orbital position from
which Cablevision already has a license for some channels.

That was expected. What's new is that Cablevision chairman Charles Dolan
would be able to buy one of EchoStar's existing satellites and lease capacity on
two others, giving Dolan enough flexibility to offer local TV signals to
whatever customers he got.

Although more extensive than expected, The proposal is widely viewed on Wall
Street as too little, too late. Merrill Lynch & Co. Inc. analyst Marc Nabi called the
proposal "a creative solution" but noted that it would still not make
financially troubled Cablevision a viable competitor in the
business.

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