'Direct' anti-trust questioning to 'Echo' concerns
WASHINGTON — EchoStar topper Charlie Ergen will have plenty of persuading to do next week when testifying before not one — but two — Capitol Hill committees on the controversial question of whether his conglom should be allowed to merge with DirecTV.
The landmark union would virtually lock up the direct satellite broadcasting biz in the U.S., prompting serious anticompetitive concerns throughout Washington.
On Tuesday, both the influential House Judiciary Committee and the House Subcommittee on Telecom and the Internet will hold hearings on competition in the video distribution market, and how the lay of the land might look if the EchoStar-DirecTV merger goes through. Judiciary has skedded its hearing for the morning; the telecom subcommittee will meet in the afternoon.
While the country’s two largest birdcasters announced the merger more than a month ago, they have yet to log formal merger application papers with the Federal Communications Commission. Insiders said papers could be filed with the FCC as early as Friday.
In addition to needing the FCC’s blessing, the merger also needs to clear the U.S. Dept. of Justice. The department’s review will likely be tougher than the FCC’s, zeroing in on anticompetitive concerns. It’s not clear whether EchoStar-DirecTV have filed papers with the Justice Dept.
Washington seems to be most concerned about the impact of the merger on rural areas, where there is no cable.
Ergen already has been making the rounds in the nation’s capital, assuring policymakers he is open to the idea of a national pricing policy for rural areas.
When convening on Dec. 4, the House telecom subcommittee will expand the scope of its hearing to focus on consolidation of the TV biz in general, summoning key players from various trade orgs, such as the National Cable & Telecommunications Assn. and the National Assn. of Broadcasters. Reps from News Corp. were invited to participate, but declined. News Corp. topper Rupert Murdoch’s bid for DirecTV was aced out by Ergen.
When it comes to the EchoStar-DirecTV union, both congressional panels are likely to take testimony from smaller direct broadcast satellite companies that would clearly be impacted by the merger.