# Small Cable Challenges DBS Merger



## Steve Mehs (Mar 21, 2002)

The American Cable Association filed a letter with the Federal Communications Commission criticizing EchoStar and DirecTV for clouding "the record with vague generalizations and hyperbole" concerning their pending merger.

The ACA, which represents nearly 1,000 small independent cable businesses serving almost 8 million subscribers, filed the letter in response to statements made to the FCC by EchoStar and DirecTV about what they said were their "competitive disadvantage to incumbent cable systems."

"DBS growth in smaller markets shows that the applicants are at no competitive disadvantage. In fact, just the opposite is true - DBS has substantial advantages over small cable," Matt Polka, president of ACA, said in his letter to the FCC. He added that EchoStar and DirecTV have no intent to foster competition with smaller market cable systems, but rather eliminate the operators.

The ACA president said a combined DBS company will have at least three ways to weaken and eliminate competition from smaller market cable systems: Use of monopoly control over DBS to extract programming cost concessions; bottleneck control over program distribution; and exploitation of small cable's disparate regulatory burdens.

"In short, the record has shown that this merger is about the dominance by DBS of smaller markets and the elimination of competition for millions of subscribers, not about fostering competition and benefiting customers," the ACA letter said.

In response, EchoStar said it's not on a level playing field with cable - even small cable operators - given that it faces limitations in delivering local programming.

"It's an undisputed fact that consumers want their local news, weather, sports, and other unique, locally-produced programming. DBS, whether it be DISH Network or DirecTV, is not an equal competitor in any market where it does not offer local channels," EchoStar spokesman Marc Lumpkin said.

DISH Network or DirecTV can't offer local channels in smaller markets on their own, and will be limited to offering local channels in the top 50-70 TV markets out of a total of 210. "With the merger, every community in America will have a viable competitor to the entrenched cable operator, and every customer will pay the same price, whether they live in a town of five or a city of five million," Lumpkin said.

From SkyReport (Used with Permission)


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## Nick (Apr 23, 2002)

It is the height of arrogance that those
who are a monopoly within their
terrestrial franchises should object to
the legitimate objectives of their only
competition. 

Hmmm. How self-serving is that? 


Nickster :smoking:


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## woodman (May 17, 2002)

Everyone (and his brother) make a big point out of the monopoly that would be created by the merger of 'E' and 'D' ......

Just what do they think "cable" is and has been for decades? I for one, am looking forward to a knock-down, drag-out war between a unified DBS-monopoly VS. the cableTV-monopoly - may the better man win (which is DBS, of course).


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## Mark Holtz (Mar 23, 2002)

In many communities, cable is granted an exclusive license to operate, and the only way around it is with DBS.

Even though I may be paying a bit more for DBS than with cable, I'm getting a lot more, including channels which some people wish the local cable company was carrying.


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