RUS: Can DBS Merger Save $1B?
By Ted Hearn -- Multichannel News, 5/21/2002 1:21:00 PM
A federal agency is asking whether the proposed merger between EchoStar Communications Corp. and DirecTV Inc. parent Hughes Electronics Corp. could save taxpayers a potential $1 billion loan liability.
The agency -- the Agriculture Department's Rural Utilities Service -- is charged with administering a new program that allows the federal government to guarantee $1 billion in loans to providers of local TV signals in unserved and underserved areas in the United States.
The loan program was established in 2000 under the Launching Our Communities Access to Local Television Act (LOCAL TV).
In an April 30 notice in the Federal Register, the RUS sought comment on its observation that the LOCAL TV law might become moot because EchoStar has promised that the new company would offer local TV signals in all 210 TV markets, likely within 24 months.
'One developing factor that may have a significant impact on the provision of local TV signals is the recently proposed merger of the two major direct-broadcast satellite providers,' the RUS said in a two-page notice. 'The [LOCAL TV] act could be noticeably affected, and its goal virtually fulfilled, if certain requirements are imposed on the survivor.'
The RUS has opened a notice of inquiry on the merger's impact on the LOCAL TV law. Comments are due May 30.
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