Ergen makes last-ditch pitch

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Faced with regulators' rejection of his planned takeover of direct-broadcast satellite rival
DirecTV Inc., EchoStar Communications Corp. chairman Charlie Ergen is proposing
changes that would allow a new DBS competitor into the game.

Ergen acknowledged to a SkyForum crowd in New York that Department of Justice staffers have
raised objections and seem likely to recommend that the government reject the
deal.

Industry executives said Ergen and DirecTV proposed giving up some of
their satellite spectrum to a new entrant.

There are a couple of other entrants looking for a way into the business, but
they lack the spectrum to provide as many channels as DirecTV or EchoStar can
today, much less when their satellite licenses are combined.

The most prominent is Cablevision Systems Corp.'s Chuck Dolan, who has a license and a
satellite under construction but lacks capacity for a fully competitive service
and is in financial trouble.

Echoing a letter to the Federal Communications Commission sent Monday, Ergen urged the FCC to delay ruling
on the merger until DOJ staffers reviewed changes to the merger that he was
proposing. "Those structural changes mean new entrants in the marketplace,"
Ergen promised.

Rejection of the deal could leave Ergen on the hook for a $600 million
breakup fee and still require his $2.4 billion takeover of ailing international
DBS player PanAmSat Corp.

If approval isn't secured by Jan. 21, DirecTV can pull the pin and ask for
payment.

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