House Energy and Commerce Committee chairman Billy Tauzin (R-La.) is planning
to meet Tuesday with EchoStar Communications Corp. chairman and CEO Charlie
Ergen and DirecTV Inc. chairman and CEO Eddy Hartenstein to discuss their $25.8
billion satellite-TV merger.
Tauzin, a direct-broadcast satellite proponent for more than one decade,
wants to give the proposed merger a careful review to ensure that it promotes
competition and expands consumers' choice.
'Our biggest concern is the impact of having just one satellite company
providing multichannel-video programming,' Tauzin spokesman Ken Johnson
said.
Johnson said Tauzin is planning to meet with Ergen and Hartenstein Tuesday.
On Sunday, Ergen briefed Tauzin on the deal by phone, and Tauzin had dinner in
Detroit Sunday night with Rick Wagoner, president and CEO of General Motors
Corp., DirecTV's corporate parent.
The merger would reduce the DBS market from two major players to just one.
Johnson said Tauzin wants to know if DBS concentration would reduce choice or
bolster competition with cable.
'The question we have to answer is: How do you define competition in today's
marketplace? Is it satellite versus satellite, or is it satellite versus cable?'
Johnson said.
Although Congress does not review mergers, key lawmakers often send letters
trying to influence merger regulators.
Assuming the deal involved the transfer of DBS licenses, the Federal
Communications Commission would have to approve it. Either the Federal Trade
Commission or the Department of Justice would also have to grant approval. The
DOJ has traditionally reviewed DBS mergers.
Legg Mason Wood Walker Inc. media and telecommunications analyst Blair Levin
said government approval was possible but not likely because of the elimination
of a DBS firm from the market.
The Consumers Union said it would ask the DOJ to block the deal unless the
companies agree to two conditions -- one protecting rural customers without
access to cable from DBS price-gouging, and a second requiring the DBS industry
to drop its opposition to a DBS spectrum-sharing plan proposed by Northpoint
Technology Ltd.
