Texas Stations Oppose EchoStar-DirecTV

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A Texas television-station owner is urging rejection of EchoStar
Communications Corp.'s merger with DirecTV Inc., claiming that the combination
would harm local broadcasters.

Johnson Broadcasting Inc., owner of two independent stations in Houston and
Dallas, filed an opposition to the merger Jan. 24 with the Federal
Communications Commission, which must approve the $25.8 billion deal.

'As a combined entity, they would have overwhelming control of the DBS
[direct-broadcast satellite] market,' Johnson said in an eight-page filing.

EchoStar's merger with DirecTV would create a DBS giant with at least 14.9
million subscribers, giving the new company 90 percent of the DBS market and 17
percent of the entire pay TV market.

EchoStar told the FCC in December that the merger would promote competition
to cable operators. The new company would provide local TV service in 100
markets versus about 40 today, offer high-speed Internet access nationwide and
carry about 12 high-definition-TV channels.

Johnson's opposition to the merger is tied to that company's inability to
gain DBS carriage.

Both EchoStar and DirecTV refused to carry Johnson's stations Jan. 1. Johnson
was required to mail its must-carry elections to the DBS carriers by July 1,
2001, but the company mailed the letters July 2, one day late.

Johnson filed complaints with the FCC, but the agency's Cable Services Bureau
rejected them, saying that it would strictly enforce the July 1 deadline, which
the company had known about for months.

Johnson maintained that because July 1 was a Sunday, it had an additional
business day to send the letters under FCC rules.

Johnson has appealed the CSB's actions to the four FCC commissioners. If
Johnson's appeals are denied, its stations will not be eligible for DBS carriage
until 2006.

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