Late last week, regulators at the US Federal Communication Commission suspended a review of the proposed $26 billion satellite TV merger of EchoStar Communications and DirecTV pending further information from EchoStar.
The merger requires government approval and would allow the creation of the largest pay-TV service in the United States.
Initially, media baron Rupert Murdoch had worked for over two years to buyout General Motors’ holding in Hughes Electronics that operates the DirecTV brand name, but lost out at the 11th hour to a competing offer by EchoStar Communications which operates under the brand name Dish Network.
As required under US communication laws the Federal Communications Commission (FCC) had been reviewing details of the merger and whether it would create a monopoly in the industry to determinant of consumer interests.
Originally EchoStar and General Motors had hoped the review would be completed in six months, but as a near monopoly the merger is a sitting duck for both regulators and politicians wanting to show a little backbone.
After facing a hostile Senate panel Wednesday, Reuters reported that several senators said that in addressing the monopoly concerns inherent in such a major merger would require a major undertaking for government regulators including monitoring any compliance issues.
And that even if regulators were convinced consumers’ interests could be protected under such a plan, there is little interest in D.C. for expanding the feds’ role in the marketplace, they said.
The next day the FCC review process came to a halt until the the agency is given more information from EchoStar. According to AP and other wire reports the FCC had asked both companies to provide detailed information on their profits, losses and products.
During recent Senate testimony by the CEOs of EchoStar and DirecTV, the executives argued that the merger would enhance access to television and internet services outside of major urban areas, while also ensuring the industry was a financially viable competitor to the entrenched cable TV market.
