MARKET DEFINITION, PUBLIC INTEREST CITED IN ECHOSTAR FILINGS

Intelsat said Commission should follow its own precedents by defining DBS markets “in a manner that does not impose artificial distinctions based on the use of particular transmission facilities.” It cited several FCC decisions, including in Comsat case, in which FCC considered similar services provided over different transmission facilities to be part of same market. Intelsat said agency should “continue to recognize the interchangeability of space and terrestrial facilities” in defining markets.

Support for deal also came from Competitive Enterprise Institute (CEI) and Progress & Freedom Foundation (PFF). CEI said it was “impossible to think of a serious argument” against sale since new company would have 17% of multichannel video market, and it was “ridiculous” to think of satellite transmission as separate market. Only opposition, it said, is from “competitors who want to use the antitrust laws as a barrier to effective competition.” PFF said acquisition involved only “2 of many competitors in an increasingly dynamic and diverse market” and said “potential benefits of the merger… far outweigh the potential costs.”

Circuit City and Thomson Multimedia said deal would make more DTV programming available via satellite, spurring DTV market, and would make DBS more competitive with cable. Circuit said “if anyone were to be concerned, it would be Circuit City,” since it sold DirecTV hardware. Nevertheless, it said deal was in public interest because it would help reduce cable dominance of multichannel video market. It also said it would allow more efficient use of spectrum, end wasteful duplication, cause more DTV carriage. Thomson called multichannel video market “fiercely competitive” and said deal would boost DTV since EchoStar had “committed to greatly expand the number of available high-definition programming channels.”

EchoStar and DirecTV already are having “serious competitive impact” on smaller markets and “contributing to business failures” by small cable operators, American Cable Assn. said: “A DBS monopoly will irreversibly tilt the competitive playing field in smaller markets with substantial harm to the public interest.” Small cable companies can’t compete effectively against “a DBS monopoly,” ACA said. CWA said reduced competition would result in higher consumer prices and reduced program diversity.

EchoStar’s refusal to carry Carolina Christian TV stations prompted that firm to oppose deal, saying it would “keep viewers from receiving local ethnic, foreign language and niche programming.” Univision said EchoStar had “sought to defeat” every effort to ensure DBS served needs of public, including minorities. It cited what it called EchoStar’s “abysmal track record of carrying local broadcast stations and other programming aimed at minority audiences… The Commission should not reward such behavior.”

Consumer groups said deal wouldn’t be in public interest unless FCC imposed conditions, including: (1) Requiring enforceable guarantee that company would offer nondiscriminatory pricing in rural markets. (2) Considering structural solutions such as divesting orbital low satellites or transponders if there were no pricing guarantee. (3) Licensing quickly terrestrial competitor such as Multichannel Video & Data Distribution Service. (4) Establishing mechanism to guarantee EchoStar complied with requirements for set-aside public interest channels. (5) Requiring EchoStar to provide open access for satellite-delivered Internet service providers.

Assn. of Public TV Stations also said FCC should set conditions on approval, including: (1) EchoStar should be required to provide local-into-local carriage for TV stations in 110 markets within 120 days of closing deal. (2) All local stations should be carried on EchoStar’s primary satellite, rather than requiring separate receiver dish.