A lead outside antitrust attorney for Hughes Electronics Corp. predicted
Monday that the proposed merger between Hughes and EchoStar Communications Corp.
would receive regulatory approval within three to five months.
Peter Standish, a senior partner at law firm Weil, Gotshal & Manges LLP,
gave his optimistic view of the proceedings during a conference call hosted by
Morgan Stanley Dean Witter & Co. satellite analyst Vijay Jayant.
'This is a significant review, as people expected it would be. I just didn't
know it was going to be this popular,' Standish said, referring to the level of
opposition the merger has received both in public government filings and in the
press.
The good news for the merger, Standish said, is that historically, the
antitrust division of the Department of Justice has been 'fairly immune' to
political pressures regarding merger reviews.
When asked what the direct-broadcast satellite companies would not be willing
to give up, Standish answered that lawyers don't like to negotiate consent
decrees in the press or in the public. But he did say that giving up any of the
DBS orbital slots 'would wreak tremendous havoc on the synergies of this
transaction.'
Standish said he wasn't surprised that the cable industry didn't file
comments with the Federal Communications Commission opposing the merger. Doing
so would have lent support to the DBS providers' claims that a merger would
create a stronger competitor to cable, he said.
He added that some cable operators don't want to 'throw stones' because the
government still needs to review the merger between AT&T Broadband and
Comcast Corp.
It's not unprecedented for the DOJ to approve a merger that would create a
market duopoly, Standish said, citing the steel, defense and baby-food
industries as examples.
'The reasons are as many and as varied as the players are,' Standish
said.
He added that the DOJ would likely consider the impact the merger would have
on overall competition, pricing and product output.
Because the merger would allow the DBS companies to reclaim duplicative
spectrum, the output would likely be increased, he argued.
