Ergen: DBS Merger Avoids Cable Rereg
By Ted Hearn -- Multichannel News, 5/1/2002 2:00:00 PM
Charlie Ergen, chairman and CEO of EchoStar Communications Corp., is pitching a new idea in support of his merger with DirecTV Inc. parent Hughes Electronics Corp.
Without the merger, Ergen said, the direct-broadcast satellite industry will lose significant ground to the cable industry and cause Congress to consider reregulation of cable rates.
'DBS will not have the local channels to compete in rural America or the broadband services to compete in the cities. This will lead to calls for reregulating cable rates -- precisely the opposite outcome that was espoused by policymakers,' Ergen said in a speech to the Federal Communications Bar Association.
Ergen plugged the deal as the best hope of establishing nationwide competition with cable operators for digital-TV and broadband Internet-access customers.
The courts and the Federal Communications Commission are likely going to allow greater consolidation within and between the cable and broadcasting industries, and the DBS industry should be allowed to concentrate its resources to match the increased power of its rivals, he said.
'DBS must be allowed to follow suit to remain competitive,' Ergen added.
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