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Sky high squabble

Proposed EchoStar-DirecTV merger draws fire

Antitrust groups have started weighing in on the proposed hookup of EchoStar and DirecTV: not surprisingly, they don’t like the deal.

“Some merger proposals are so outlandish that you wonder why they were put forward,” Albert Foer, prexy of the D.C.-based American Antitrust Institute.

“When EchoStar first put this idea forward it was such obvious antitrust-bait that (DirecTV parent) General Motors rejected the deal,” he added. It’s back on the table as of last weekend with an unsolicited bid by Charlie Ergen’s company.

Common wisdom has been that Ergen would be hard pressed to make a case to regulators for combining the nation’s top two satellite providers. A merge of DirecTV and its smaller rival EchoStar would cover 90% of U.S. satellite households. That’s particularly worrisome for rural customers who don’t have access to cable.

Ergen is insistent that the deal would pass regulatory muster since the FCC and FTC would and should look at the entire pay TV market, not just satellite. He has said he’s willing to institute a national pricing plan to protect rural subs. And he’s warned that a combination of DirecTV and News Corp., which has been hashing out a deal of its own for months, could threaten consumers with its concentration of content and distribution.

Foer, as many others have, pointed out an antitrust action pending in a Colorado court where EchoStar accuses DirecTV of illegally precluding competition in the satellite market. Ergen said the suit has been stayed until late August.

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