EchoStars Call for Cable-DBS Ban Aimed at PrimeStar

Author:
Publish date:

Washington -- EchoStar Communications Corp. last week
called for the exclusion of cable operators from the direct-broadcast satellite industry,
voicing a minority view among cable and DBS companies that filed comments with the Federal
Communications Commission.

"Strict and well-defined ownership limitations are
necessary to halt the marginalization of DBS as a viable competitor to cable,"
EchoStar said in its April 6 FCC filing.

Even so, EchoStar's proposed ban came attached with an
admittedly self-serving caveat: It said no ban should be adopted subsequent to an FCC
decision to allow cable-backed PrimeStar Inc. to join forces with Rupert Murdoch's
News Corp.

Assuming that PrimeStar could convert to high-power DBS
with its News partner, EchoStar said it would be unfair for the FCC to adopt a cable-DBS
cross-ownership ban that would evidently apply prospectively to all DBS players except
PrimeStar.

EchoStar said its ability to compete with a PrimeStar-News
alliance might require it to join forces at some point with cable operators that are
unaffiliated with PrimeStar. But such a business venture would be precluded by a cable-DBS
ban.

"It would be inappropriate to deny other DBS providers
what, at that point, might sadly become their only choice -- providing complementary
services in conjunction with cable operators," EchoStar said.

The FCC is considering a cable-DBS ban at the same time
that it is reviewing an application to assign the last prime DBS orbital slot to
PrimeStar.

The Department of Justice is also reviewing the PrimeStar
deal, amid reports that antitrust officials at the DOJ want to block the deal or require a
major restructuring. PrimeStar sources have been saying for months that they expect
approval, perhaps subject to a consent decree.

While EchoStar endorsed a ban, fellow DBS competitors
DirecTv Inc. and U.S. Satellite Broadcasting argued against such a rule, recommending that
the FCC look at cable-DBS combinations on a case-by-case basis. PrimeStar said it favored
a case-by-case method, too.

The National Cable Television Association said there was no
political support for a broad cable-DBS ban.

"Proposals to impose DBS-cable cross-ownership bans
have been rejected by both Congress and the FCC in the past, and there are no new
circumstances that warrant revisiting those conclusions," the NCTA said.

The Small Cable Business Association, an opponent of the
PrimeStar deal, declined to file comments with the FCC. An SCBA source said the
organization would likely file reply comments April 21.

Related