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Washington reacts to AT&T-Comcast - Broadcasting & Cable

Washington reacts to AT&T-Comcast

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Comcast Corp.'s proposed $72 billion merger with AT&T Broadband is all
the more reason why the federal government should approve EchoStar
Communications Corp.'s proposed purchase of Hughes Electronics Corp., EchoStar
chairman Charlie Ergen said.

'Simply put, the EchoStar-Hughes merger is the best hope to create the
efficiencies necessary to compete effectively against these cable behemoths,'
Ergen said in a release late Thursday.

Ergen isn't the only one who feels that way, nor is he the only one using
this latest merger to push his own agenda.

'Big isn't synonymous with bad,' said Ken Johnson, spokesman for Rep. Billy
Tauzin (R-La.), chairman of the House Energy and Commerce Committee. 'But
clearly, a combined Comcast-AT&T would change the dynamics of the
marketplace.'

Johnson added, 'It could well bolster EchoStar's bid to acquire Hughes, and
it most certainly would help us to make a case for passing broadband
legislation. At the end of the day, when all of the dust from the mergers has
settled, Congress will have a distinct choice. We can deregulate the telephone
companies or reregulate cable to ensure that consumers are protected from
monopolistic practices.'

Opposing Tauzin's point of view was Rep. Ed Markey (D-Mass.), who long has
argued that cable is a monopoly that should be regulated to keep prices down and
programming diverse.

'The obvious issues are diversity in programming, open access and concern
over cable rates,' Markey staffer Colin Crowell said. 'It also underscores why
the EchoStar-Hughes merger is problematic and anti-consumer. Assuming these
things go through, if you have increased consolidation on the wireline side, it
isn't good public policy to leave consumers with only one satellite provider for
the foreseeable future.'

Public-interest advocates felt similarly.

'Americans should be very worried about how this new combination will affect
what they pay each month for cable and Internet service; whether they will be
able to fairly access different channels and services; and, more important, how
this new mega-giant poses risks to our democratic society,' said Jeff Chester,
executive director of the Center for Digital Democracy.

The Federal Communications Commission is reviewing its horizontal cable
ownership, which the D.C. Circuit Court of Appeals threw out in March.

The FCC had considered the ceiling on ownership of cable subscribers to be 30
percent of TV households, including attributable interests in other cable
companies.

Now that limit is under question while the agency reviews its rules,
considering whether to reinstate them and at what level. The FCC had no comment
Thursday.

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