States would take legal action to stop monopoly, Nixon spokesman sez

Even as antitrust attorneys for Hughes assured investors Monday that a proposed $26 billion tie-up with rival satcaster EchoStar is on track, a coalition of concerned state attorneys general reiterated it could still head to court to try to block the deal.

Weil, Gotshal & Manges partner Peter Standish, repping Hughes, insisted during a conference call with Wall Street heavyweights that the threat of a suit by a group of 30 state attorneys general was overblown. During the call, Standish outlined the rigorous regulatory review the merger is being given in Washington by the Federal Communications Commission and the U.S. Dept. of Justice.

“There’s been a little bit of noise in the system about the role of the states. There’s been press speculation that some state might sue imminently — that is incorrect,” Standish said. “The states and DOJ seem to be working quite cooperatively and we’re fully involved with them in that process.”

But the office of Missouri Attorney General Jay Nixon, who is spearheading the states’ effort, said in no way had the idea of a lawsuit been dropped.

“Nothing has changed. The states are continuing to communicate among themselves to discuss possible legal strategies, which certainly includes the possibility of a lawsuit.,” Nixon spokesman Scott Holste said. “Maybe it’s not imminent, but it doesn’t mean it’s not out there. We will certainly take legal action to stop the formation of a monopoly, if push comes to shove.”

Rural restriction

The state attorneys general, along with some Capitol Hill solons, are particularly concerned that an EchoStar-DirecTV merger would create a monopoly in rural areas where there is no cable.

Standish and another antitrust attorney on the call reiterated that the satcasters are willing to come up with a uniform pricing plan for rural areas. Outside of such regions, satcasting has plenty of competition from the cable biz, which has plenty of giants.

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