OPPOSITION TO ECHOSTAR-DIRECTV DEAL PICKS UP STEAM AT DoJ

Meanwhile, one group that supports deal is Frontiers of Freedom. “The DirecTV-EchoStar merger is the only way to get high-speed Internet services to rural America,” Chmn. Malcolm Wallop said. “The fact is, neither the phone or cable companies will invest the millions of dollars necessary to string the many miles of fiber optic cable necessary to bring high-speed Internet to rural America. This unfairly leaves rural Americans on the other side of the Digital Divide.”

NRTC has provided DoJ with “volumes of information” and “the facts and the law are there to deny the merger outright,” Pres. Bob Phillips told us. He said NRTC had met with Justice 2-3 times. American Cable Assn. Pres. Matthew Polka said fact DoJ was meeting with grass-roots organization proved deal was in trouble. DoJ “has recognized what is going to happen” if it’s approved, he said. Polka said ACA provided DoJ with data to show “what kind of leverage a merged satellite company with 18 million subscribers will have on small businesses in rural areas.”

EchoStar would use influence with program providers to get programming at much lower rates than rural competitors, Polka said. He said 3 primary providers in rural areas -- DirecTV, EchoStar and independent cable company -- would be reduced to 2 with deal. Smaller, independent cable operators eventually would shut down because of “burdensome regulations” such as having to provide free public access channels and emergency alert systems, Polka said: “We would have a situation where the larger satellite company would have a much more favorable regulatory environment and better conditions than smaller business.”

That govt. should choose competition over DBS monopoly was recurring theme at rally attended by about 50 protesters. “Merger means take it or leave it,” National Consumers League Pres. Linda Golodner said: “It’s EchoStar or nothing. For the rest of us, it means you'll be left with a cable monopoly and a satellite monopoly.” Recent lawsuit by attorneys gen. in states prove “EchoStar isn’t a company we can trust,” she said. Also at event, Rep. Cannon (R-Utah), vice chmn. of Congressional Western Caucus, said if deal were allowed, EchoStar would “dominate digital services in rural America. With lack of choice comes declining customer service, higher prices, inferior programming and stifled innovation.” He reminded protesters that 140 members of Congress, including Hispanic Caucus, and most of chmn. and ranking members of key oversight committees opposed deal. “I can’t imagine how this has dragged on for so long,” Cannon said: “We need to end [talk about deal] now.”

EchoStar has poor history of labor relations, specifically in Cal., Kan., N.Y. and Pa., said George Kohl of CWA: “Our experience with EchoStar is EchoStar lies.” In N.Y. Kohl said 5 union supporters were fired and employees were denied promised raises in dispute involving DISH network technicians who were attempting to organize labor union. “EchoStar will stop at nothing, including breaking the law, to make sure that its employees are not able to exercise their legal right to form a union,” Kohl said. He said AFL- CIO, Teamsters and International Brotherhood of Electrical Workers also opposed merger. Other rally speakers included May, Polka, Randy Tyree of Assn. of Mo. Electric Co-ps, Charles Crawford of American Council of the Blind, Robert De Posada of Latino Coalition, Albert Foer of American Antitrust Institute, Cassandra McKee of US Action, Leroy Watson of National Grange and Paul Hazen of National Co-op Business Assn.

Protests and filings “have a significant amount of influence” with regulators, May said: “It will allow DoJ to see the breadth of this opposition” which cuts across political lines. “There are a whole range of people” that oppose deal, he said.

DoJ probably will oppose deal, but EchoStar still has chance to propose concessions, Legg Mason analyst Blair Levin said. If govt. blocks deal, EchoStar and DirecTV are “likely [to] haggle over how to unwind the deal” with EchoStar balking at paying $500 million breakup fee as well as paying full $2.7 billion for Hughes stake in PanAmSat, Levin said in Wed. report.

“NAB and NRTC are competitors who would like to gain from regulatory officials what they can’t gain in the marketplace,” EchoStar spokesman said: “They are seeking to protect themselves from increased competition from a stronger EchoStar at the expense of the consumer.” Spokesman said NRTC sold DirecTV services in rural areas at $3-$4 more monthly. He said if local channels could have been provided without deal, EchoStar “would have done it by now.” Without combination of 2 companies, DBS companies will be “limited to top 50 markets.” He said move would also provide “spectrum efficiencies and critical subscriber base” to lower cost of high-speed Internet access to $40-$50 per month from $70 that would compete more favorable with cable and telephone companies. Spokesman also said EchoStar had “been involved in collective bargaining” negotiations with labor unions since last year. He said “it’s typically a lengthy process,” but EchoStar “will continue to meet and bargain in good faith.”