Four years ago, EchoStar Communications Corp. advocated adoption of a federal
rule prohibiting the common ownership of cable and direct-broadcast satellite
companies as a way of promoting competition in the pay TV market.
Earlier this year, the Federal Communications Commission declined to adopt
the rule. That's likely a good thing for EchoStar chairman and CEO Charlie
Ergen, who is hoping that a deal with cable operator Cablevision Systems Corp.
can salvage his $25.8 billion merger with DirecTV Inc. parent Hughes Electronics
In February 1998, the FCC initiated a cable-DBS cross-ownership rulemaking at
a time when PrimeStar Inc. -- the medium-power DBS carrier owned by major cable
MSOs -- was seeking FCC approval to acquire a key DBS license from Rupert
Murdoch's News Corp. and MCI Communications Corp.
'EchoStar supports, in principle, a cross-ownership restriction as between
cable operators and DBS providers. Plainly put, such a restriction would prevent
cable operators from co-opting scarce DBS-spectrum resources,' EchoStar said in
an April 6, 1998, filing with the FCC.
On Monday, EchoStar officials were to meet with Department of Justice
officials to go over a plan proposing to shift vital DBS spectrum to
Cablevision, which is hoping to create a new national DBS competitor next year,
Cablevision spokesman Charlie Schueler said Monday that chairman Charles F.
Dolan and president and CEO James L. Dolan flew to Denver Oct. 14 to initiate
talks with EchoStar.
Cablevision is the nation's seventh-largest cable operator, and it dominates
the New York area with 2.9 million subscribers.
On Oct. 10, the FCC rejected the DBS merger as anti-competitive and
monopolistic for millions of U.S. consumers. EchoStar is hoping a deal with
Cablevision can secure DOJ and eventual FCC support.
On Monday, Rep. Rich Boucher (D-Va.) sent a letter to Attorney General John
Ashcroft urging him to 'favorably examine' the structural changes made to the
original DBS merger.