WASHINGTON — EchoStar was feeling like the big bird on the block Tuesday as it predicted victory in winning Capitol Hill support for the proposed merger with DirecTV, a deal that would virtually lock up the satellite broadcast market.
Speaking at a Charles Schwab investment seminar in downtown Washington, D.C., EchoStar regulatory counsel David Goodfriend said congressional reaction to the deal has been “really positive.” He said solons recognize that the merger will actually promote competition by ensuring a viable alternative to cable, both in terms of programming and broadband services.
But EchoStar and DirecTV still have a lot of convincing to do before appeasing antitrust concerns and winning clearance to merge from the Federal Communications Commission and the Dept. of Justice.
Declaring that the EchoStar-DirecTV engagement must be rigorously reviewed, FCC chair Michael Powell has already set up a special inter-agency team to pour over the merger once the two direct satellite broadcast companies submit formal paperwork. While Powell is keen on deregulation, not even he can ignore the ramifications of the satellite combo.
There had been some question as to whether it would be antitrust officials at the Justice Dept. or at the Federal Trade Commission who would review the merger. That speculation ended Tuesday when the Dept. of Justice confirmed that it would be studying the deal. Frankel is acting chief of Justice’s antitrust telecom task force.
Washington is sure to seek certain concessions before blessing the merger, particularly when it comes to customers in rural areas who have no access to cable, only to satellite broadcasters.
Pols like Rep. W.J. “Billy” Tauzin (R-La.), chair of the House Commerce Committee, have told EchoStar topper Charlie Ergen they would like to see a national pricing plan covering rural areas. Ergen hasn’t ruled out such a concession.
Ergen also must win over Sen. Ernest Hollings (D-S.C.), chair of the Senate Commerce Committee. Hollings is likely to be more wary of the merger than Tauzin.
The deal cleared a big financial hurdle earlier this week when Credit Suisse First Boston stepped up to provide the $2.75 billion EchoStar needs to follow through with the DirecTV buy.