EchoStar and Hughes Present Merger Plan to FCC
February 28, 2002
EchoStar Communications Corp. and Hughes Electronics Corp., the parent company of DirecTV, have submitted a proposal to the FCC that will enable the companies, after a prospective merger, to deliver local broadcast TV channels and offer high-speed satellite Internet access to all of the 210 Designated Market Areas in the United States. The companies also filed a response to comments on the merger previously filed with the FCC on Feb. 4.
The companies presented the plan, called "Local Channels, All Americans," in a joint satellite application. The plan was developed by Dish Network and DirecTV engineers. The companies asked for permission to launch a spot-beam satellite that will work with four existing and under-construction spot-beam satellites. The satellite network will achieve spectrum efficiencies by combining frequencies from three of the companies' orbital locations and will enable the merged company to broadcast local TV channels in all the DMAs, including compliance with federal must-carry requirements.
Currently DirecTV and EchoStar deliver local broadcast channels via satellite to 42 metropolitan markets. The prospective merger will eliminate carriage of duplicative content (more than 500 channels) from the DirecTV and Dish Network satellites.
According to EchoStar, 42 million TV households do not have the option to receive local channels via satellite, and must subscribe to cable to receive them. The new plan will offer millions of consumers in small and rural markets an alternative to cable, according to both companies.
New set-top boxes and satellite dishes, which will be able to receive satellite signals from multiple orbital slots, will be provided free to existing DirecTV and EchoStar customers. Subscribers will receive programming from the merged satellite service via one satellite dish and will pay the same fee. The companies also claim that the combined services will also offer more HD channels, interactive services, expanded national programming and more educational, specialty and foreign-language programming. The rollout could be completed as early as 24 months after the merger is approved.