EchoStar Communications Corp. may be trying to breathe life back into its
merger proposal with Hughes Electronics Corp.'s DirecTV Inc. with help from
Cablevision Systems Corp.
Earlier this month, the Federal Communications Commission gave a thumbs-down
to the $16 billion merger between the two satellite-TV providers, saying it
would eliminate competition, particularly for rural customers.
A Washington Post article Monday cited unnamed sources saying EchoStar
is trying to forge a deal with Cablevision to sell some of its
satellite-transponder spectrum and sell or lease satellites to the MSO.
A Cablevision subsidiary, Rainbow DBS, is set to launch a spot-beam satellite
in March, with plans to start up a satellite-TV service by the end of 2003.
A spokeswoman for Cablevision said the MSO is not commenting on the report.
Selling the spectrum and satellite real estate could make the fledgling
Rainbow DBS a new competitor, possibly alleviating regulators' concerns that
there would be only one satellite-TV service if EchoStar and DirecTV merged.
It's not exactly a new concept. Back in July, Rainbow DBS asked the FCC to
consider giving it EchoStar's orbital capacity in the 61.5 degrees west orbital
position. Rainbow has a license to operate small-dish service at 61.5
In September, the MSO filed a brief with the FCC outlining its DBS plans and
in part arguing for the EchoStar-DirecTV merger.