WASHINGTON — In an effort to woo an intransigent Justice Dept., beleaguered satcaster PrimeStar has named former EchoStar exec Carl Vogel its new chairman and CEO.
Unlike Primestar prexy and chief operating officer Dan O’Brien, Vogel has never worked for any of the five major cable companies that currently control the medium-powered satcaster. In addition to the hiring of Vogel, PrimeStar is working to restructure its ownership in a way that would significantly lower the equity stake of Time Warner, TCI Satellite Entertainment, Cox, Comcast and MediaOne.
PrimeStar is hoping to increase the stake of GE Americom, which currently holds a small stake in the company. O’Brien, who formerly worked for Time Warner, refused to comment Wednesday on reports that defense industry giant Loral may be looking at an investment in the company.
Vogel, whose appointment had been expected, is currently the CEO of Star Choice Communications — a Canadian DBS company, and he is the former president of EchoStar Communications.
“We intend to optimize our chances of gaining approval for the (News Corp. DBS licenses),” said O’Brien, adding, “We have to significantly restructure the ownership of our business, and we are working on that.”
The Justice Dept. filed a lawsuit seeking to block PrimeStar’s plan to acquire $1.1 billion worth of satcasting efforts from News Corp. In its complaint, the Justice Dept. argued that a satcasting company controlled by the nation’s five largest cable companies could not be expected to compete vigorously with the cable industry.
In the wake of soaring cable rates, federal regulators are looking to the satcasting industry to provide the kind of competitive pressures that will restrain cablers’ fee hikes.
PrimeStar says it wants the News Corp. assets, which News Corp. jointly owns with MCI, so it can enter the high-powered DBS business and compete directly with DirecTV and EchoStar’s Dish network. Subscribers to DirecTV and EchoStar receive signals through a pizza-sized reception dish, while PrimeStar’s reception device is much larger — making it less attractive for urban and suburban audiences.