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DOJ Blocks Satellite TV Merger
EyesWideOpen writes "The Justice Department filed a lawsuit to block a merger between EchoStar Communications and Hughes Electronics that would have created the nation's largest pay-television service, stating that 'This merger would give EchoStar control of the skies for the provision of video programming by satellite, leaving customers to suffer from the resulting reduction of competition'. The FCC had already voted unanimously to oppose the merger because it would create a monopoly that would have 'adverse' effects for consumers."
Adverse effects??? Someone care to tell me where the hell these people were when Cable companies took root in my town??? Oh, did I say companies? I meant company... Adverse effects of that don't seem to bother these idiots... so much for affordable broadband via satellite throughout the country... so much for local tv service in real digital quality (not the digital BS cable has)... Ick... At first glance this seems like a great victory against monopolies... but what does it really mean???
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Programming is like sex... Make one mistake and support it the rest of your life.
I work at a large electronics retailer, and I've noticed many times that customers have difficulty distinguishing between the competing products, Dish and DirectTV. Prices and products are similar. On the other hand, I also see the two constantly respond to the other's promotions and price changes. Pricing of both products have reached the point where setup, installation, and the required hardware is essentially free. I'm sure that wouldn;t have been the case for long had the merger been apprived. It's also nice to see the likes of AT&T be forced to respond to the competetive pricing of the sat. providers. They're still expensive by comparison, but imagine how much worse it would be without these competitors.
I want the fire back.
I agree. Where I live, it's AT&T for cable, and that's all. Up until recently, it was USWEST/QWEST for phone service. I guess the satellite companys just didn't bribe enough politicans.
How dare the government regulate where I get my media! What are they socialists???
/Satire, or, at least something like it.
They don't care about my rights as a consumer to have ALL my services charged on one convenient bill, all my services installed and fixed by one courteous, prompt repairman!
My life is so convenient when I can get all this stuff from one, homogenous provider! Maybe the government would like to provide all these services, oh, wait a minute, maybe it's not so socialist afterall.
See Richard Gere's Ass Zoo
tcd004
I skimmed through the article, but I'm quite curious about some aspects of it.
It is fair to say that the concerns that led to the passage of US merger laws, and the goals that the laws aim to achieve, are not unique to the United States.
All countries that have adopted merger statutes will recognize them: putting limits on large concentrations of economic power, protecting small businesses, preserving competition, protecting jobs, encouraging economic efficiency, and protecting consumers against anticompetitive price increases. The explosion of new merger laws in recent years suggests that the issues may be close to universal.
Department of Physics and Atmospheric Science, Dalhousie University, Halifax, N.S., Canada, B3H 3J5
Adverse effects like small markets being able to get their local 3-5 stations over satellite? Adverse effects like a somewhat faster satellite internet connection? Adverse effects like nation-wide pricing? Silly me, I must need to check the definition of adverse.
You're only as smart as your brain.
Opposing this merger on antitrust grounds is a no-brainer. It would mean the entire US would have but one satellite provider, which would be a total monopoly in those areas not served by cable. (Actually, there are ways for US residents to get Canadian satellite service from ExpressVu, like http://www.global-cm.net/).
However, this sudden affection from the Bush administration for strictly enforcing antitrust law is obvious horseshit. Dish won a bidding war for Direct by outbidding Rupert Murdoch's Fox conglomerate. Murdock, a renowned political conservative (he of Fox News, and the NY Post, among other things) figured (correctly, as it turns out) that the politicans his lobbyists bought over the years--primarily Republicans--could be counted upon to do his bidding. And so they have.
Everything the FCC has been doing under Michael Powell is pro-merger, pro-consolidation, anti-consumer.
So, I say, what's the frequency, Michael? What's the hidden agenda here - because there obviously must be one.
Could this be an example of the government doing something right? And maybe, just maybe protecting the rights of its citizens?
A good move, especially considering that the barrier for entry to that industry is so insanely high that only Microsoft would dare attempt it.
With that said, how much do you want to bet that Microsoft tries to buy one of them?
evil adrian
Satellite hackers around the US and Canada are outraged at this move by the FCC. Rob Mishka, a long time connoisseur of free (read: stolen) satellite TV, was quoted as saying "We are just sick of having to deal with two different encryption keys every damn week. If they merged we would only have to deal with one!". Rob then spit out the tobacco he was chewing and went to work on the Trans-Am that has been raised on 8 bricks in his front yard since 1998.
Someone obviously forgot the hookers and blow.
They come BEFORE the merger, not after.
[o]_O
It means you won't be facing a monopoly in the sky just like the one you've currently got on the ground. I think the companies involved will muddle on through to providing the services you desire without merging into a mega-corp.
Supposed the two dish companies had merged? How popular would it have been for them to have immediately jacked the prices up? But, you say, they could have done it anyway, because people would have had no choice? Well, there IS still air channels. Or, radical idea here! Quit watching TV! Ahh...now I see the problem. The State made sure to preserve the people's Bread and Circuses. If people stopped watching TV, they might start reading or something hazardous.
But slightly more seriously, to take it to an illustrative extreme, the satellite networks join, and jack prices way up. How long can they keep that up? A demonstrated low level of profitable service has apparently been illustrated at the current level. If they exceed this, the pressure just keeps increasing for someone to come in from underneath and displace them as cheap as they currently are operating. It might take 2 or three years, but it will happen. Oh wait. No it won't. Too much government red tape to get through. :-P
Meanwhile, the two existing companies can collude a little bit, and stay just good enough, and lobby just enough to keep screwing you more than unfettered competition would.
What the hell, if they did abuse their market, maybe it would be a good thing. The next dish network to displace them might use 6" dishes, or roll out broadband cable/internet or something. The existing companies are not as likely to do that; they are happy where they are, making money.
I'm sure it seems like this is a great thing, having prevented a satellite TV monopoly, but look again: unlike cable, which is limited only by the expense of laying and lighting cable, satellite has severe constraints on expansion of their service. It's really expensive (and risky) to launch a satellite, there are limited orbits for them to use, and limited frequencies for them to use. A merger would have meant that the two companies could have pooled their resources and offered local channels throughout the country. Instead there's a huge duplication of effort, neither of which is adequate. So instead of less populous areas being subject to a monopoly (whose prices could have been controlled by other means, namely a single nationwide pricing scheme), they're subject to NO decent service. Cable, meanwhile, enjoys an effective monopoly in all those areas, at whatever price it feels like, assuming it feels like serving them at all.
(BTW: another brain-dead, protectionist aspect of the legalities surrounding satellite TV - unless you're in a particular local broadcast market, you're not allowed to receive channels in it - even if the equivalent channel doesn't exist in your area, or no local service is available for your area! I.E. I can't get UPN nor WB via satellite, despite the fact that they are actually broadcasting it off the same bird I would receive from. )
---If you can't trust a nerd, who can you trust?
The only cure for obstructions is to cut down trees or remove buildings.
However, several years ago the FCC ruled that building codes and deed covenants could not be used to block a homeowner from installing a small satellite dish or antenna to receive broadcast TV.
I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
Most mergers don't do much for the shareholders. In fact, most M&A activity is counterproductive. You'd think otherwise, but, in fact, making the company formed by a merger work properly is hard.
The biggest point is that in most areas (in temrs of geography) of the country, this reduces multi-channel tv systems from two to one company, and it cities with cable, from 3 to 2.
When the merger first came out it didnt seem so bad, because both satellite companies had stagnated for a while in terms of adding content and local markets (aka local-in-local, or LiL). But in the past year, three spot-beam satellites have become operational, and one more is scheduled to come online. Both Dish network and DirecTV have (or will have soon) the capability to serve the top 100 or so television markets (there are around 220 DMA, or designated viewing areas). Dish Network actually has the capability to serve all 220 DMAs using other oribtal locations for satellites that can see half the country (at 61.5 degrees Wests and 148 degrees West, where as the current satellites that can see all of the CONtinental US are located at 101, 110, and 119 degrees west, aka the three CONUS slots).
The only thing that the merger would have helped is HDTV offerings. Right now, each provider has 4-5 HD channels. As more come online, there will be a bandwidth crunch (since each HD channel will take up the space of 4-6 regular channels). Maybe at the maximum, there will be room for about 20 HD channels for each provider, but there is not enough bandwidth to provide more than that.
Also, Charlie Ergan (the CEO of Echostar, the owner of Dish Network), has done a number of things to piss off the FCC (like challenging the law that says if a provider carries any number of local channels from a city, it must carry all of the channels for that city, regardless of how popular the station is). After he lost the appeal for this law, he tried to do an end-run around the law, and put the most popular networks (the big four plus WB and UPN and in some cases PBS) on the main satellites, and require users to put up a second dish for the smaller stations. The FCC got pissed and told Echostar to do a number of remedies to fix the situation. They have come into compliance of the recomendations, but its still very iffy.
All and all, its a good thing this merger was rejected. The downside is that now Rupert Murdoch will now be the likely owner for DirecTV. Which is better, the devil you know, or the devil you dont?
The Doormat
If you're not outraged, then you're not paying attention.
There are some other interesting tidbits in the piece, like that the potential satellite competitor is interested in offering some 40 HDTV channels. The WSJ is unabashedly free-market, so they support the revised merger, apparently with the opinion that neither company can combat cable companies independently.
Honestly the only way Sattelite TV was to be a threat to Cable television and end their monopoly reign over people is to merge Echostar and Dtv. With Echostar and Dtv merged into 1 company, they could offer all the locals to all markets, but with the merger being block local channels can only be offered to some markets instead of all of them.
Cable Co's feared a merged Echostar/Dtv, as they wouldn't have a monopoly anymore and Sattelite TV was a real threat with all local market channels being offered but they have nothing to fear now.
Remember when having cable tv meant you had pretty much commericial free tv? The big 3 had to
have commericials to pay for the shows. Cable TV is something you HAVE to pay for. Now there are
as many or more commericials on CABLE TV. So I not only pay the %$#^@'s for the cable, but also
have to endure #$(#^(# commericals.
I would let them have their monopoly if they would promise to get rid of the commericials.
When the government allows companies to merge into huge monopolies, they are only laying the foundations for socialism -- and that's the last thing we ever want in America.
The terms "fascism" and "socialism" get thrown around here all the time. Please review their definitions.
From Marriam-Websters:
Main Entry: socialism
Pronunciation: 'sO-sh&-"li-z&m
Function: noun
Date: 1837
1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2 a : a system of society or group living in which there is no private property b : a system or condition of society in which the means of production are owned and controlled by the state
3 : a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done
Main Entry: fascism
Pronunciation: 'fa-"shi-z&m also 'fa-"si-
Function: noun
Etymology: Italian fascismo, from fascio bundle, fasces, group, from Latin fascis bundle & fasces fasces
Date: 1921
1 often capitalized : a political philosophy, movement, or regime (as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition
2 : a tendency toward or actual exercise of strong autocratic or dictatorial control
In both cases, society or nation is emphasized over the individual.
Surely a merger is good for consumers?
Exactly the opposite, actually.
A merger does not mean that every channel on each existing service automatically gets pulled on to the new service
Let's take SlashDotters' favorite content niche, Porn, as an example. (L33T HAxx0Rs and other fourteen-year-olds, please note the correct spelling).
Let's say the New Merged Company (NewCo) decides they want to charge a higher premium for Porn. Not pay the content provider (e.g., Playboy) any more, just charge a higher premium. Some subscribers pay it happily, others grudgingly, others drop the channel(s). There is little either the content owner (Playboy) or the consumer can do. With only one distributor -- one trucking company driving the food from the farm into the local grocery store -- the distributor makes the rules and sets the margins.
Let's say you are a struggling Porn network and you want to get distribution. If NewCo decides it has enough Porn channels at the moment (with Playboy's 4 or 5 or whatever it is), you're done. At the moment, with two sources of satellite distribution, the newer smaller nets are more likely to get a niche, as each distributor uses it as leverage against their compeitor ("Get a Subscribution to Dish, we have the CowboyNeal Porn Channel, the other guys don't!")
If the Porn Channel is entenched with NewCo, and its CEO plays golf with NewCo's EVP Programming every Sunday, it's pretty much on a path to squeezing out more copycat Porn channels to the consumers while figuring out exactly how frequently it can raise rates. Why not? No competition will be introduced. In fact, the distributor can quite handily use its position as the single distributor to dictate exactly what type of new channels should be introduced, and, more disturbingly, how the content on existing channels should be modified.
Worst of all, yet not unimaginable (especially given our niche example) NewCo might (albeit foolishly) even decide they did not want to carry Porn.
As an aside, I am fascinated to see so much support for this merger here on SlashDot. It is getting tougher and tougher to figure this place out. Not that that is a bad thing, of course. Makes for some interesting discussions.
In land mass, it's probably more than half, but in population, it's only about 15%.
If you read the FCC's decision (available from www.fcc.gov), they repeatedly mention that without the merger the two companies can still provide local into local service for 100 of the roughly 200 DMA's in the country. Had the merger been accepted, it would have been all 200.
I really don't see how satellite can possibly COMPETE EFFECTIVELY against cable, when they're only provide local-into-local service for the larger metropolitan areas, which may even have multiple cable companies also competing!
The DOJ could easily make sure that the New Echostar keeps its promise of uniform pricing, and make no mistake, They're not making a whole lot of money from us people in Farm Country (as I am), so it wouldn't make sense for them to create "uniformly high pricing", unless they wanted to just roll over and die.
The FCC generally makes decisions that are friendly to broadcasters. Look at their decisions against satellite over the last few years. They (and Congress) regard satellite companies as essentially wanting to steal television from Over The Air broadcasters.
I quit watching the major networks (ABC/NBC/CBS/FOX) about 3 years ago, when I couldn't get a decent signal over-the-air. I get UPN and WB via satellite superstations, and I watch those quite a bit. Broacasters should have been fighting tooth and nail for this, but instead they generally opposed it, probably out of habit. I might actually start watching network TV again, if I could get it on sat.
I'm very angry at Rural TV, and other "rural" groups that opposed this merger. As a rural person in a DMA that will likely never get locals via satellite, I am very angry at these people that are supposedly representing me. They don't speak on my behalf.
The entire problem here is that the company selling you service is the same as the company owning the satellites. This is no different from when long distance service was sold to you by the same people who sold you your (overpriced) monopoly landline phone service.
What North America needs is separation of these two areas. (Standard) DVB could do this and still provide the same service level North American currently enjoys. A satellite would be blasted into orbit by an actual telecomms company, a satellite TV station would rent time from them to put their station on the air, and, if necessary, they would encrypt the channel and sell the service to North America in general if they felt Advertising revenue wouldn't cover their rental costs (note: In most cases it would -- A large percentage of what you see on DSS has already been broadcast in the clear on one or two satellites before it makes it to you, largely commercial free). You could buy individual channels that you want (assuming those aren't free), you wouldn't worry about DishNet having UPN and DirectTV not, and there's no middle-man. Not to mention you'd be able to use the huge amount of GREAT DVB gear out there, including computer capture cards. And the freedom of any company being able to broadcast TV as long as they can pony up the cash necessary to do it would be excellent.
Right now we have two companies with a pile of hardly used birds up in the sky. There's complete overlap on four of them, making two useless. Another one broadcasts the (largely unreceived) HDTV content, and so on.
When will this happen?
Beats me. My bets are on 20 or 30 years into the future, or maybe when the current birds run out of fuel. I do know it has to happen sometime. It's inevtitable.
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
What does it mean ?
It means that Rupert Murdoch and News Corp won in its battle to keep the US satellite market open for them to try and dominate as they do in Europe.
Look for News Corp to snap up one of these payers within a year or so at firesale prices.