DirecTV/EchoStar to provide local channels to all! (1 Viewer)

[Robert Crawford]

This morning while at work, I read a press release on my company's website that DirecTV and Echostar will provide local channels to all customers, once their merger is completed. I didn't read any specifics about the implementation timing of providing these local channels but it sounds like excellent news to their customers. Hopefully, this press release will make it to other news-gathering organizations sometime today.

Crawdaddy

 

[Robert Crawford]

EchoStar and DirecTV on Tuesday dangled an oversized carrot before opponents of their proposed marriage, ambitiously promising to deliver local broadcast channels in all of the country's 210 television markets.

For years, broadcasters have fought bitterly with satcasters over carriage of local channels. The contentious issue is the major reason why the National Assn. of Broadcasters is publicly opposing the merger.

Combined, the two carry local broadcast signals in 42 markets. When the linkup was first announced, EchoStar CEO Charlie Ergen said the number would be upped to 100 markets once the deal was blessed.

Reaching out to rural areas

Ergen and DirecTV chairman-CEO Eddy Hartenstein spelled out their latest plan in filings with the Federal Communications Commission, which is reviewing the deal. They also reiterated their pledge to offer one national rate to rural customers with no access to cable.

"Today, approximately 42 million TV households do not have the option to receive local channels via satellite and, as such, have no choice but to subscribe to cable. Without this merger, many of those will never see local channels on satellite and have no choice of local television providers," Ergen said.

The dramatic offering was clearly designed to mute the loud chorus of those opposing the merger on grounds that it would represent a monopoly and hurt consumers.

NAB prexy-CEO Eddie Fritts said he, for one, isn't appeased.

"Today's announcement appears to be a step in the right direction, but needs to be more carefully scrutinized to determine its legitimacy. Broadcasters have had a long and tortured history of bad-faith dealings with EchoStar and its chairman (Ergen). Accordingly, we continue to oppose the merger."

Investors pleased

But investors lauded the satcasters' announcement as a step in the right direction toward assuaging the concerns of a diverse and increasingly virulent set of critics.

"Clearly it increases the potential benefits to rural customers," said Ladenburg Thalmann media analyst John L. Stone. "To the extent that it serves an important social need from the regulators' and lawmakers' perspectives, it is a strong selling point as well."

On Wall Street, EchoStar climbed more than 7% and DirecTV parent Hughes Electronics added 5% -- in a moderately negative market -- amid optimism that the announcement could help turn the merger's fortunes in Washington.

Stone said the new plan pushes up the timetable dramatically from the decade or more it would have taken each separate company to carry all local fare. EchoStar and Hughes can use their satellite bandwidth more efficiently if they combine their systems.

All 210 markets would be served within two years of the merger being finalized, Ergen said. The EchoStar-DirecTV combo would serve roughly 14.5 million customers, 90% of the satcasting market.

When it comes to the pay TV market, the combo would take only a 17% slice.

Ergen said the merger is by no means a monopoly and it should be viewed as competition to cable.

"Yes, we'll be 100% of the satellite business, but we're a small piece of the pay television market," Ergen said. "The Justice Dept. is going to look at it from antitrust grounds, and this merger is allowed under antitrust law because of the great efficiencies and benefits of the merger."

In addition to the FCC, antitrust toppers at the U.S. Dept. of Justice also must give the go-ahead for the deal to close.

Easing pressure

Among the myriad foes that may draw encouragement from Tuesday's announcement is Rev. Al Sharpton, who recently traveled to EchoStar's Littleton, Colo., headquarters and to Ergen's home to demand a range of concessions in return for his support of the deal.

Members of his campaign also were on hand in D.C., protesting outside the hotel where Ergen and Hartenstein held a media briefing.

"They're certainly going to keep the heat on now," Stone said of all the opponents.

A number of Capitol Hill pols are carefully tracking the deal, saying they have serious concerns. Early next month, there will be a Senate hearing on the merger.

Date in print: Thurs., Jul. 13, 2000

 

[Ryan Spaight]

Interesting. I'm kind of torn on this one -- I hate to see just one satellite company, since I think the Dish/Direct competition has been a good thing for both systems. But, at the same time (as a DirecTV customer), I would love to get local channels (which I can't now) and see expanded HDTV offerings (provided I can watch them on my obsolete analog-only HDTV).

Can't wait to see how this plays out.

Ryan

 

[Dave Schofield]

I'm going to enjoy seeing them gang up on Cable companies across the country. I'm in an area with only one cable option, and they just raised their rates $10/month on everyone... Right now it is Sat vs. Sat, after this merge it will be Sat vs. Cable. We'll still see the benefits of competition, just not among the same peers.

 

[Dan Joy]

All of this is contingent on approval for merger
We also remeber a certain person saying "READ MY LIPS-NO NEW TAXES!" They will also have to put a new sat in the sky, surely we the consumer will have to pay for this. I am all for locals on sat as long as I get great reception, But here in OK, I doubt that will happen

 

[Brad Newton]

I truly hope that this merger passes & quickly. My parents have cable & their prices just increased. Their picture quality is also nowhere near to my DishNetwork picture. I would love to have the locals via Dish & ultimately the hd.

 

[Kevin Coleman]

480I locals? What a waste of bandwidth.

Kevin C.

 

[Mark_Wilson]

Not a waste of bandwidth if they give us the ability to watch networks from other states, in addition to my current local ones.

 

[PaulKH]

Why would anyone want to watch local stations in other areas? You like seeing the same local news (fire, murder, car crash, weather, weather, and more weather, and local sports) from other places?

Plus, all local channels means even more compression! Oh goody.

I enjoy FREE over the air HDTV broadcasts.

 

[Mark_Wilson]

It means I can record shows that conflict with other programs in my local area.

 

[Robert Crawford]

I enjoy FREE over the air HDTV broadcasts.

What about the rest of us that don't have the option of not only receiving HDTV broadcasts but also other local channel broadcasts. Where I live I'm even too far to pick up my Fox channel with an antenna which leaves me little choice besides cable.

Crawdaddy

 

[Robert_J]

Not a waste of bandwidth if they give us the ability to watch networks from other states, in addition to my current local ones.

You can't do that. When you live in a city that is carried on E* or D* you can only get the stations in that city. If you live in a city that is not carried, you can get waivers from you local stations (denied 99.9% of the time) to get a national feed from NY or LA. A grey area is called "moving". Keep your billing address as your current address but change your service address to a city that has locals carred on the sats. That worked fine for D* until Dec. 27 when all locals except LA and NY moved to the new spot-beam satellite. (E* will have their spot-beam active in a month or two) The local channels are aimed on a smalled beam to cover a city and the surrounding area. By having multiple beams, they can re-use channel numbers and transponder frequencies. This is how they will carry so many locals in this proposal.

-Robert