Paperwork plan gives Cablevision competing edge
On Thanksgiving eve, EchoStar filed an amended merger application with the Federal Communications Commission that seeks to address antitrust concerns by giving upstart satcaster Cablevision a competing edge.
Paperwork spells out a plan that would relinquish satellite space to Cablevision. Also, EchoStar said it would commit to signing resale programming deals with Cablevision.
In October, the FCC turned down the proposed EchoStar-DirecTV merger, marking the first time in 30 years that federal regulators have scuttled a major media deal.
The FCC, as well as the Justice Dept, said the merger would achieve a monopoly in rural areas with no access to cable.
Washington insiders say it’s unlikely that the FCC would reverse itself and bless the EchoStar-DirecTV union, even with the Cablevision concessions.
To some degree, EchoStar is obligated to fight the FCC and DOJ rulings. Otherwise, EchoStar could have to pay a $600 million breakup charge to Hughes Electronics, EchoStar’s parent company.
If EchoStar makes a good-faith effort to make the merger work, it may avoid having to pay the kill fee. As of Jan. 6, Hughes can apparently walk away and collect the fee if the deal hasn’t been approved.
This fall, Cablevision told the FCC that it wanted to get into the satcasting biz, proposing that EchoStar give up some of its satellite spectrum.
Federal regulators expressed doubt that such a plan would eradicate antitrust concerns associated with an EchoStar-DirecTV merger.