Dish And DirecTV Figure If XM And Sirius Can Merge...

from the try-try-again dept

You may remember back in 2001 that EchoStar, then owners of the DISH Network, tried to buy DirecTV from then owner Hughes (who was owned by GM at the time). However, after the Justice Department said no to the deal over antitrust concerns, it fell apart. However, the rumors going around are that the two companies (now just DISH Network and DirecTV, sans various parent companies) are thinking about trying again. Apparently, they believe that the regulatory and competitive environment that doomed round 1 wouldn't happen in round 2. And, of course, this time around, they can point to the fact that the two satellite radio systems, XM and Sirius, were allowed to merge (even if it took a year and a half).
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Filed Under: antitrust, mergers, satellite tv
Companies: directv, dish network

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  1. icon
    Errant Garnish (profile), 7 Aug 2008 @ 5:32am

    Food for thought

    XM-Sirius won the anti-trust battle by arguing that satellite radio is a technology, not a market. Merging will not reduce competition but will enable them to compete better with terrestrial radio, MP3 players, and all the other things people listen to or get their news from other than satellite radio.

    DTH television is in the same state, especially now that television shows and movies are available for download to a variety of devices that sit comfortably alongside the living room TV (i.e. XBOX, PS3, AppleTV...).. Not to mention that the Telcos have come on strong. DirecTV and Dish don't just compete with each other, they compete with Comcast, Verizon, AT&T, etc.

    Satellite TV is also a technology, not a market. If DirecTV and Dish merged, what would they have a monopoly on? Little steel discs on people's roofs? The vast majority of consumers have alternatives.

    Another issue is the inefficient use of satellite resources with two redundant full-service DTH operators. There are only so many orbital slots available in the sky over North America, and it is redundant (and expensive) to have two satellites both beaming the same stuff. The satellite industry likes a crowded sky because then they can raise transponder fees and sell new technologies like Ka band and MPEG-4 to squeeze out capacity from existing slots, but this raises costs for the consumer.

    In today's competitive landscape, does anyone really believe that a DirecTV/Dish merger would result in higher rates for satellite TV?

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