Ergen's Dish Network eyes XM-Sirius Merger as positive sign for merger
Dish Network CEO Charles Ergen has been keeping his ears to the ground and eyes closely on the XM Radio/Sirius Merger as a sign that the political landscape may be changing enough to make another attempt to merge with rival satcaster Directv Inc.
The last attempt to get past the FCC and Justice department in 2002 ended badly with both regulators deciding it was not going to happen and would not be in the public’s best interests.
Since then however a number of things have changed, chiefly the successful merger of XM Radio and Sirius, which Echostar could use as a loose blueprint to clear the federal regulators in Washington and become the leading satellite broadcaster in America. The political landscape in America is also changing, with Democrats likely to make some significant strides this fall in both the house and senate and possibly even the white house.
Technology has also changed since 2002 as well, with increased video competition from cable and large telco’s as well as other mediums such as Apple TV and Netflix. When it comes to a possible Dish Network/Directv merger, increased competition works in their favor, because it helps to show federal regulators that people would always have an alternative to fall back on. That alternative, or lack thereof back in 2002 was a big sticking point as Washington regulators saw that rural Americans did not have the same choices as urban ones, with many still unserviced by cable vision, relying instead on over the air television broadcasts or satellite TV.
This may again prove to be a sticking point as many of these rural customers still do not have access to telco high speed internet, cable internet or other broadband alternatives, hence many of the “video alternatives” continue to remain unavailable to them. Additionally, the impending 2009 digital convergence of over the air television signals will only worsen the situation for many of them as the UHF frequencies allocated for digital television signals simply do not have the same propagation as their VHF analog counterparts, meaning a lot of rural customers will simply no longer be able to receive them without significantly improving their terrestrial antennas. With digital television, you can either have an acceptable signal, or you have no signal. There are no weak, snowy, but still viewable signals. Also with the digital signals needing new set tops boxes or digital tuners built in, rural customers are likely to become even more dependent on satellite television than ever before as bother satellite broadcasters stand to take advantage of this as soon as the 2009 deadline rolls around. The double edged sword nature of this means it will be good for business however not good for being able to show that a single satellite television monopoly would be a benefit for consumers.
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