Opposition to EchoStar deal mounts
LONDON - Opposition to EchoStar's £18.3bn acquisition of DirecTV has begun to mount as more US politicians have attacked the deal, saying it will harm satellite TV viewers and reduce their service.
The latest to attack the planned merger was Republican senator Andrew Cuomo, who yesterday spoke out against the deal.
Speaking to the New York Post, Cuomo said: "The merger would be anti-competitive, anti-consumer and would create a prima facie monopoly in the satellite TV industry. If consummated, this merger would eliminate consumer choice for satellite TV and would raise costs and reduce the quality of service for viewers."
EchoStar was hit earlier by its own old anti-trust lawsuit which it had filed against DirecTV, accusing it of abusing its dominant market position. The deal came back to bite, following the launch of its takeover bid for its US satellite TV rival.
The deal is now opposed by a group of 80 members of Congress, who have formed a coalition to take their fight against the deal to Attorney General John Ashcroft and Federal Communications Commission chairman Michael Powell.
The coalition argues that rural viewers in the US, who can presently choose between two rival satellite providers, will find themselves reduced to a choice of one.
The merger would create a company with 16.7m subscribers, bigger at present than the US's largest cable operator, which has 14.4m subscribers.
EchoStar chief executive Charles Ergen has already faced a barracking on this issue from US competition regulators in a hearing by the House Judiciary Committee.
Ergen, however, argues that the merger, which will see the combined company control 90% of the US satellite television market, should be judged in the context of the entire pay-TV market. This includes cable operators and providers of satellite TV using much bigger satellite dishes than those supplied by DirecTV and EchoStar.
However, this argument was questioned by the chairman of the House Committee, James F Sensenbrenner, who reminded Ergen of a filing he made against DirecTV last year, accusing it of anti-competitive practices, when he maintained that large dish providers were obsolete and declining.
Sensebrenner told Ergen to make up his mind which view he believed was accurate and to inform the court accordingly.
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