blcjet
December 2nd, 2002, 02:32 AM
EchoStar and DirecTV parent Hughes Electronics
submitted their amended merger proposal to
the Federal Communications Commission, a
revised application that's full of divestures
to Cablevision's proposed DBS entity,
Rainbow DBS.
In October, both the FCC and the Justice
Department's antitrust staff said they would
block the proposed EchoStar/DirecTV
combination. But the FCC gave the companies
until the end of November to submit a
revised merger proposal.
Specifically, EchoStar and Hughes said they
would divest EchoStar's 11 frequencies at the
61.5-degree slot to Rainbow. EchoStar also
said it would assign to Rainbow its right to
operate over 6 frequencies at the 61.5-degree
orbital location that's under lease with
Christian DBS operator Dominion - assuming
that the lease arrangement permits assignment
by EchoStar.
The companies also said they would divest 24
frequencies at the 148-degree slot, and
EchoStar's temporary authority to operate
additional frequencies at both locations.
That would give Rainbow DBS 51 DBS frequencies
at orbital locations not considered
full-CONUS, or lacking full coverage of the
entire United States. The slots would give
the company coverage of the Eastern half
and Western end of the country.
In addition, EchoStar said it would sell
its EchoStar III satellite and lease its
EchoStar I and EchoStar II birds to Rainbow
DBS. The companies also said they would
share with Rainbow backhaul facilities for
local broadcasts, and give Rainbow the right
to resell a merged company's full line of
DBS services.
"Instead of a '3 to 2' or a '2 to 1,' this
transaction will be a '3 to 3' or '2 to 2'
in most areas of the country," EchoStar and
Hughes said in the filing. "By virtue of
the divesture proposal, which will strengthen
Rainbow, consumers will benefit from a more
powerful competitor than either EchoStar
or DirecTV would be alone - a move from two
spectrum-constrained providers that will
be substantially strengthened compared
to the status quo."
The merging companies also said Cablevision
and Rainbow DBS will have the financial
power to make satellite TV work, especially
given the recent sale of Cablevision's
Bravo network to NBC. "That transaction
increases substantially the capital that
could be available to Rainbow and should
remove any remaining doubt that Rainbow's
entry will become likely, timely and
effective by virtue of the amended
merger proposal," the petition said.
submitted their amended merger proposal to
the Federal Communications Commission, a
revised application that's full of divestures
to Cablevision's proposed DBS entity,
Rainbow DBS.
In October, both the FCC and the Justice
Department's antitrust staff said they would
block the proposed EchoStar/DirecTV
combination. But the FCC gave the companies
until the end of November to submit a
revised merger proposal.
Specifically, EchoStar and Hughes said they
would divest EchoStar's 11 frequencies at the
61.5-degree slot to Rainbow. EchoStar also
said it would assign to Rainbow its right to
operate over 6 frequencies at the 61.5-degree
orbital location that's under lease with
Christian DBS operator Dominion - assuming
that the lease arrangement permits assignment
by EchoStar.
The companies also said they would divest 24
frequencies at the 148-degree slot, and
EchoStar's temporary authority to operate
additional frequencies at both locations.
That would give Rainbow DBS 51 DBS frequencies
at orbital locations not considered
full-CONUS, or lacking full coverage of the
entire United States. The slots would give
the company coverage of the Eastern half
and Western end of the country.
In addition, EchoStar said it would sell
its EchoStar III satellite and lease its
EchoStar I and EchoStar II birds to Rainbow
DBS. The companies also said they would
share with Rainbow backhaul facilities for
local broadcasts, and give Rainbow the right
to resell a merged company's full line of
DBS services.
"Instead of a '3 to 2' or a '2 to 1,' this
transaction will be a '3 to 3' or '2 to 2'
in most areas of the country," EchoStar and
Hughes said in the filing. "By virtue of
the divesture proposal, which will strengthen
Rainbow, consumers will benefit from a more
powerful competitor than either EchoStar
or DirecTV would be alone - a move from two
spectrum-constrained providers that will
be substantially strengthened compared
to the status quo."
The merging companies also said Cablevision
and Rainbow DBS will have the financial
power to make satellite TV work, especially
given the recent sale of Cablevision's
Bravo network to NBC. "That transaction
increases substantially the capital that
could be available to Rainbow and should
remove any remaining doubt that Rainbow's
entry will become likely, timely and
effective by virtue of the amended
merger proposal," the petition said.