Northpoint Pushing DBS-Merger Condition


Northpoint Technology Ltd. is entering the debate over EchoStar
Communications Corp.'s proposed merger with DirecTV Inc. by advocating an
approval condition that would require the direct-broadcast satellite company to
deploy set-top boxes that work with other technologies.

In a two-page white paper circulating on Capitol Hill, Northpoint said
EchoStar-DirecTV should be forced to provide consumers with boxes that can
receive signals from unaffiliated terrestrial and satellite services.

'Now is the perfect time to impose an openness condition. EchoStar and
DirecTV boxes are not compatible. Millions of new boxes must be designed and
ordered. Standards have not been set,' Northpoint said.

Northpoint is awaiting word from the Federal Communications Commission on
whether it can provide video programming and high-speed Internet access by
sharing DBS spectrum -- a move opposed by EchoStar and DirecTV on the basis of
harmful interference.

Presumably, if Northpoint's merger condition were adopted, EchoStar-DirecTV
subscribers with set-tops with open standards could switch to Northpoint's
service without needing new set-top equipment.

In 1998, the FCC -- in trying to create a retail set-top-box market in the
cable industry -- ordered cable operators to provide point-of-deployment modules
to subscribers with retail boxes so they could unscramble premium programming.
Moreover, the FCC banned cable operators from deploying integrated boxes in

In the white paper, Northpoint noted that the FCC exempted DBS carriers from
the cable set-top rules on the basis that DBS was a new entrant and its boxes
were already available at major retail outlets.

'In 1998, DBS may have been a new entrant, but now, it threatens to become a
new monopoly,' Northpoint said.

'If the merger is approved without an open-access condition, EchoStar will
become a monopoly capable of using the set-top box as an anti-competitive
bottleneck -- just like its monopoly brother, cable, did,' the company