# CEOs Outline DBS Merger/Local TV Plans



## Guest (Feb 27, 2002)

DirecTV, its parent Hughes Electronics and EchoStar brought their three CEOs to Washington, D.C., Tuesday to try to squelch opposition to their merger.

They came to a press breakfast proclaiming that the proposed $26 billion deal promises to deliver local TV to all DMAs, high-speed Internet access and 12 or more high definition television channels. The proposed merging company also is promising to offer services to consumers using a single rate card nationwide.

"If you live in a town of five or a city of 5 million, we are going to offer you the same services at the same price," said Charlie Ergen, chairman and CEO of EchoStar.

The goal is to position the new EchoStar as a stronger competitor to the wire. "If we want to provide true competition to cable, it makes good business sense to provide these services," said Jack Shaw, president and CEO of Hughes Electronics.

The breakfast, which as also attended by Eddy Hartenstein, chairman and CEO of DirecTV, came the day after Hughes and EchoStar filed joint comments with the Federal Communications Commission defending their merger. DirecTV and EchoStar also filed an application for the new company to obtain a new spot-beam satellite license. With that additional satellite - which will cost more than $300 million to deploy - plus the additional spectrum the two will garner after eliminating the over 500 overlapping channels they both offer, the new EchoStar will be able to offer local channels in all 210 of the nation's DMAs.

Today, 42 million TV households do not receive local channels via satellite. After a merger is complete, the new EchoStar would go to 100 markets within a few months, and cover the entire 210 markets within two years.

The CEOs also were touting their broadband Internet access plans. Today, only 6 million of 107 million U.S. households have access to wired high-speed Internet services. Both DirecTV and EchoStar offer broadband services, but success has been limited. "We have not seen the demand in broadband," said Shaw.

The CEOs denied that their nationwide local plan was a response to critics of their merger, or a condition imposed by the Department of Justice or FCC. Instead, they said the additional offerings make good business sense for the new EchoStar.

"We don't object to someone making it a condition of the merger," said Ergen. "We're going to do it because it makes good business sense." At the same time, the three emphasized that without the merger, it would not be fiscally possible to expand their services.

The CEOs said they are confident the DOJ will approve the merger because it brings efficiencies to the market, and the FCC will appove the deal because it's in the public interest to present an alternative to cable.

Outside the press breakfast, the National Action Network tried to garner media attention, complaining about "Ergen's diabolical objective is to be the master of all satellite TV broadcasting." But the demonstrators didn't phase Ergen, who pointed out the group was representing the Word Network, an urban religious network that was not chosen as one of the two public affairs channels EchoStar added last year.

"We don't think their protests have validity," said Ergen, who added that the Word Network was a qualified provider, but EchoStar chose a distance learning channel and another minority-focused channel instead. "We're not taking a deserving network off now" because of their protest, Ergen said.

From SkyReport (Used with permission)


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## Guest (Feb 28, 2002)

I'm skeptical about the merger and the possibility that they wiil serve 210 local markets with their channels. But i think some citites don't get all the networks. Then what? What other station will they have as a susbstitution? My locals from Duluth,MN have an cbs,nbc,abc,fox and now a wb(network). No upn. Also i still hear it will still take longer to get more transponders in order for all locals to through. Anyone else have any opinions or suggestions? I mean what if some cities only have a cbs,fox,nbc?


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## Guest (Feb 28, 2002)

I would imagine that if you qualified for distant nets b4 u still do. But not nececessarily at the rate for locals.


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## Guest (Feb 28, 2002)

I hope this goes through, so I can get rid of Adelphia Cable all together!!!! ALL I WANT ARE MY LOCAL CHANNELS ON DIRECTV!!!


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