Ergen, Hartenstein defend merger

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EchoStar Communications Corp. and Hughes Electronics Corp. should be allowed
to merge to provide consumers across the United States with a stronger
competitor to cable, EchoStar CEO Charlie Ergen and DirecTV Inc. CEO Eddy
Hartenstein told members of Congress Tuesday.

'Combining EchoStar and Hughes is the only way to provide truly effective
competition to the dominant and entrenched cable companies, which control about
80 percent of the [multichannel-video-programming-distribution] market, with
nearly 70 million subscribers,' Ergen said.

Comparatively, a combined EchoStar/Hughes would control about 17 percent of
the MVPD market.

A single direct-broadcast satellite company would gain spectrum efficiencies
that would free up 500 channels, Ergen said.

Much of the gained capacity would be used to offer local broadcast signals in
the top 100 local markets, as well as in at least one city in each state that
lacks a top-100 market, such as Wyoming.

Carrying local TV stations takes up a great deal of capacity on satellites
because each signal fills one channel that covers the entire nation, even though
the channel is only received in one market.

The National Association of Broadcasters was not appeased by Ergen's pledge
to serve the top 100 markets.

The NAB strongly opposes the merger because it would 'end any hope of
expanding local-into-local television service into the majority of television
markets,' and because it 'could lead to more disruptions in delivery of local
stations,' said Michael Fiorile, president and CEO of Dispatch Broadcast Group
in Columbus, Ohio.

'The broadcast industry has little faith in EchoStar's claim,' Fiorile told
the House Telecommunications and Internet Subcommittee.

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