Consumers Union Statement On Fcc Rejection Of Echostar

FOR IMMEDIATE RELEASE
Thursday, October 10, 2002

CONTACT:
Gene Kimmelman
(202)462-6262
Consumers Union Washington, DC Office

CONSUMERS UNION STATEMENT ON FCC REJECTION OF
ECHOSTAR - DIRECTV MERGER

WASHINGTON, DC -- The Federal Communications Commission (FCC) today voted to block the proposed merger of satellite television providers EchoStar Communications and Hughes Electronics' DirecTV.

Gene Kimmelman, Senior Director for Public Policy and Advocacy for Consumers Union, made the following statement today regarding the decision:

"The merger of the two dominant providers of satellite TV naturally raised concerns, but this merger could have been structured in a way that actually helped consumers by making satellite TV a legitimate competitor to cable TV.

"Cable companies have a monopolistic grip on the vast majority of communities in America. Satellite companies haven't been able to compete head-to-head with cable because they cannot offer local TV channels in many places.

"The combination of EchoStar and DirecTV would have freed up enough spectrum for the merged company to offer local channels across the country. The FCC could have required the company to meet this goal. Satellite could have posed a serious threat to cable monopolies under the proper conditions.

"But the FCC today opted for the more narrow-minded route and voted to block the merger. It's hard to understand how the FCC thinks that it's helping consumers by blocking, rather than restructuring, this deal. It was bad enough for consumers when Congress deregulated cable monopolies and allowed rates to skyrocket. But for regulators and antitrust officials to hinder efforts to make satellite more competitive with cable simply adds insult to injury.

"Cable rates have shot up 45 percent in the six years since Congress approved the Telecommunications Act, which initiated deregulation. As separate entities EchoStar and DirecTV have not been able to discipline cable rates in most communities.

"If the FCC had been willing to take its blinders off and modify the merger, consumers could have been assured that satellite would offer the same local programming as cable nationwide, two satellite providers would serve all markets, and EchoStar-DirecTV would be able to compete for cable customers and keep prices down."

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Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers

View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

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