EchoStar, Hughes File for Merger

Tuesday, December 4th 2001, 12:00 am
By: News On 6

DENVER (AP) _ The nation's two largest satellite TV companies filed an application with the Federal Communications Commission Monday seeking approval for their merger.

The proposed merger between Littleton, Colo.-based EchoStar Communications Corp. and Hughes Electronics would make EchoStar the nation's biggest provider of satellite television, serving 15 million customers, or 17 percent of the market.

Federal regulators set up a team last month to review the proposed merger. The Justice Department also will review the proposed merger.

EchoStar, which runs the Dish Network, is buying Hughes Electronics and its DirecTV subsidiary from General Motors Corp. for approximately $25.8 billion. Under the deal, which was struck Oct. 28, GM would technically spin off Hughes and merge it with EchoStar.

``We are confident the FCC will realize with this merger that satellite TV will become truly an effective competitor to the dominant and entrenched cable companies,'' EchoStar spokeswoman Judianne Atencio said.

Cable operators claim 80 percent, or nearly 70 million subscribers, compared to 15 million customers that would be served under the combined EchoStar-Hughes, according to the FCC application.

DirecTV is the largest provider of home satellite television service in the United States with 10 million subscribers. EchoStar's Dish Network is No. 2 with 6.7 million subscribers.

The new company would expand from 42 metropolitan areas to more than 100, as well as offer an additional 12 high-definition TV channels and video-on-demand. It also would accelerate the availability and quality of two-way ``always on'' high-speed Internet access via satellite in competition with cable modem and DSL service, the merger application contends.

The new company would retain the EchoStar name and use the DirecTV brand for its services and video products.