FTC OKAYS ECHOSTAR-VIVENDI DEAL; PEGASUS SEEKS FCC ROLE
FTC gave antitrust okay to $1.5 billion Vivendi-EchoStar deal late Mon. under early termination process, which typically takes 30 days. Vivendi agreed to invest in EchoStar Dec. 14 in exchange for carriage of 5 Vivendi channels on nonexclusive basis (CD Dec 17 p3). FTC announcement was followed immediately by Pegasus filing at FCC Tues. that accused EchoStar of reneging on public promise of not employing strategy of vertical integration. Pegasus filed petition to temporarily suspend pleading cycle for EchoStar takeover of Hughes. FCC also gave EchoStar authority to launch and operate EchoStar 7 satellite at 119 degrees W.
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Pegasus said EchoStar announced Vivendi deal “only days” after FCC application was filed Dec. 3. On Dec. 17, Vivendi announced plans to acquire USA Networks. Pegasus said it was highly unlikely EchoStar officials were unaware of those “impending multifaceted arrangements” when consolidated transfer licenses were filed. Statements to Commission about vertical integration weren’t forthcoming, Pegasus said, and new EchoStar-Vivendi relationship meant pending transfer proceeding was “moving target” and should be postponed until “the full picture is presented.”
EchoStar has refused to provide SEC and FCC with key documents related to transaction, Pegasus said in filing. Commission and parties are in untenable position of having to evaluate public interest implications of proposed deal with incomplete record, it said. Pegasus attorney Patrick Grant said EchoStar had said it wasn’t “going to enter into vertical relationships. We want to see the information and for the FCC to start the cycle all over again.”
Meanwhile, EchoStar responded to complaints about programming diversity by announcing start of 2 public interest channels. Civil Rights leader Al Sharpton led protest Mon. against company decision not to carry WORD Christian Network (CD Jan 16 p4). EchoStar said request for carriage of WORD “underscores the need to approve the merger with DirecTV,” which carries WORD. Company said it would begin offering CoLours TV and StarNet to subscribers. CoLours is African American-owned network that offers African, Asian, Latin and Native American programming. StarNet is distance learning programming service that offers educational training and courses for K-12. EchoStar also released letters of support on public interest issue from RFD-TV Pres. Patrick Gottsch, Free Speech TV Pres. John Schwartz and CoLours.