WASHINGTON — A coalition of Capitol Hill senators is urging the U.S. Justice Dept. and the Federal Communications Commission to scrutinize EchoStar’s proposed merger with DirecTV to ensure that rural customers don’t lose out.
The appeal came in a letter, sent late last week to Attorney General John Ashcroft and FCC chair Michael Powell, expressing doubt about EchoStar’s commitment to offer uniform prices and local programming to rural customers should the satcaster’s merger with DirecTV receive regulatory approval.
“Accordingly, we urge the DOJ and FCC to scrutinize this proposed merger to ensure that millions of rural customers do not suffer the consequences of higher prices, fewer choices and reduced services,” the letter stated.
Missive was signed by nearly a dozen solons repping states with large rural areas, including Sen. Max Baucus (D-Mont.), Sen. Russell Feingold (D-Wis.), Sen. Charles Grassley (R-Iowa), Sen. Paul Wellstone (D-Min) and Sen. Pat Roberts (R-Kan.).
The proposed EchoStar/DirecTV merger, under review by antitrust lawyers at the DOJ and regulators at the FCC, has sparked widespread concern in Washington, as it would marry the country’s two largest satcasters. The issue of what happens in rural areas with no access to cable is one of the bigger sticking points, with some lawmakers crying monopoly.
EchoStar topper Charlie Ergen has repeatedly promised that the newly formed EchoStar/DirecTV would offer a national pricing plan to rural customers. Also, he’s promised to provide carriage of local TV stations in all of the country’s 210 television markets.
Responding to the senators’ letter to Powell and Ashcroft, EchoStar director of government affairs Karen Watson said Ergen’s commitment to rural customers remains steadfast.
“We are pleased by the thoughtful comments of these senators who are seeking to assure that their constituents benefit from the federal government’s approval of the merger. Since a key benefit of the merger is that it will provide more and better service to all Americans — especially those in rural areas who are not served by cable — we are confident that their constituents will reap great advantages when this deal is approved,” Watson said.
But Grassley and the other senators remain unconvinced, questioning why Ergen is fighting a new law that requires satcasters to carry either all local TV signals in a market or none. Ergen recently filed papers asking the U.S. Supreme Court to strike down the law.
“While we are glad to see the merger applicants recognize the importance of serving all 210 television markets, this pledge causes concern in light of the applicants’ legal efforts to overturn the law requiring carriage of all local channels in a market,” the letter said.
Ergen said he is fighting the law on principle, arguing that it’s a violation of the First Amendment for the government to make such a demand.
The senators also questioned the promise to provide rural customers with a uniform pricing plan, and urged the DOJ and FCC to condition approval of the merger on “enforced consumer safeguards.”