News

Manzullo Urges DBS-Merger Rejection

2/13/2002 3:29 AM Eastern

Rep. Donald A. Manzullo (R-Ill.), chairman of the House Small Business
Committee, is recommending rejection of the merger between EchoStar
Communications Corp. and Hughes Electronics Corp., parent of DirecTV Inc.

Manzullo expressed his opinion in a Feb. 7 letter to Attorney General John
Ashcroft. Department of Justice approval is needed for the merger to be
consummated.

EchoStar and DirecTV, if allowed to merge, would control at least 14.9
million subscribers, equaling about 90 percent of the direct-broadcast satellite
market but about 17 percent of the broader pay TV market.

In his letter, Manzullo said the merger would have clear anti-competitive
effects by eliminating competition in rural areas without cable and reducing
competition in urban areas with alternatives to DBS.

'Therefore, I am urging that the Department of Justice take the appropriate
steps to block the merger,' Manzullo said.

Two weeks ago, Sen. Orrin Hatch (R-Utah), the senior Republican on the Senate
Judiciary Committee, raised numerous concerns about the merger in a letter to
Ashcroft, but he did not go so far as Manzullo in calling for rejection of the
DBS deal.

Both EchoStar and DirecTV claimed that the merger is necessary to free up
spectrum to provide local TV signals in 100 markets (up from about 40
currently), to offer one-dozen high-definition TV channels and to offer
high-speed Internet access to consumers beyond the reach of cable-modem and
digital-subscriber-line service.

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