DirectTV, Dish Network merger forms plan to carry local channels
By Catherine Tsai
Associated Press
LITTLETON, Colo. — The satellite TV companies behind DirecTV and the Dish Network have developed a plan to let their merged company offer local channels across the country.
Associated Press
The two satellite TV providers now separately offer local channels in 42 of 210 U.S. markets. They are seeking regulatory approval for their proposed merger.
Charlie Ergen, chairman and CEO of EchoStar Communications Corp., tells news conference participants that his company, which offers Dish Network, and Hughes Electronics, which offers DirecTV, filed a joint satellite application in which they outlined plans to offer local channels in 210 markets, including Hawai'i.
EchoStar Communications Corp., which offers Dish Network, and DirecTV parent Hughes Electronics filed a joint satellite application late Monday in which it outlined its plan to offer local channels in all 210 markets, including Hawai'i and Alaska.
Federal law requires all pay-television providers to carry every channel in markets where they provide local channels. But satellite TV providers say they have had to limit the number of markets they serve because they do not have enough capacity on their satellites to beam down local channels for every community.
They say their merger, if approved by federal regulators, would let them free up satellite space by eliminating the duplicate channels that they offer now.
The extra space combined with a proposed new satellite would help the merged company eventually serve all U.S. markets with local channels.
"This is good business for us in terms of meeting the needs of our customers," EchoStar CEO Charlie Ergen said. "It's also good public policy and as a result of that we are confident the FCC will grant approval of our merger as will the other regulatory agencies."
But critics ranging from the Rev. Al Sharpton to Rupert Murdoch of News Corp. have opposed the merger, citing concerns it would form a satellite TV monopoly.
EchoStar and Hughes, meanwhile, paint the merger as a step toward creating more competition for cable.
"Today, approximately 42 million TV households do not have the option to receive local channels via satellite, and as such, have no choice but to subscribe to cable," Ergen said in a news release. "Without this merger, many of those will never see local channels on satellite and have no choice of local television providers."
The companies' filing Monday sought authority to launch a satellite that officials said would let the companies offer more local channels.
Ergen said the satellite is expected to cost about $300 million. It would be part of a fleet of 16 satellites of the combined companies if the merger is approved.
He said the cost of implementing the new plan is balanced by the prospects of getting new customers, having lower turnover of current customers and increasing revenues.
Eddy Hartenstein, chief executive officer of DirecTV, said the plan offers an economically viable prospect that neither one of the companies could have afforded in spectrum or satellite assets to do alone.
