News

Tauzin Seek Rural DBS Protections

10/30/2001 10:01 AM Eastern

Rep. Billy Tauzin (R-La.) is planning to urge U.S. competition officials to
ensure that rural direct-broadcast satellite subscribers are price-protected if
the $25.8 billion merger between EchoStar Communications Corp. and DirecTV Inc.
is approved.

Tauzin, the powerful chairman of the House Energy and Commerce Committee, met
Tuesday for one hour with the leaders of the two companies, EchoStar chairman
and CEO Charlie Ergen and DirecTV chairman and CEO Eddy Hartenstein.

After the meeting, Tauzin spokesman Ken Johnson said 6 million homes that
can't get cable must be protected from unfair pricing if only one dominant DBS
company remains after the merger.

Johnson said Tauzin wanted merger approval conditioned on a requirement that
EchoStar-DirecTV agree to a 'national uniform pricing system' under which rural
customers would pay the same as urban customers who can turn to cable if they
don't like their DBS service.

The Consumers Union advocated such a condition Monday after the deal was
announced.

Protecting rural subscribers without access to cable remained Tauzin's
'biggest concern' about the merger, Johnson said.

Nevertheless, he added, Tauzin understood that the merger might be necessary
for DBS to provide effective competition to the dominant cable industry.

'The realities of the 21st-century marketplace dictate that
companies have tremendous resources to compete with the entrenched cable
giants,' Johnson said. 'Simply put, we are not concerned with the quantity of
competition, but with the quality of competition.'

The deal needs the approval of the Federal Communications Commission and the
Department of Justice or the Federal Trade Commission.

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