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SBC Considering Buying DirecTV
Guppy06 writes "Throwing their hats into a ring that includes News Corporation, Cablevision, and General Electric, this NYT article (yadda yadda yadda) reports that #2 Baby Bell SBC is interested in buying DirecTV. After federal and state anti-trust authorities shot down DirecTV's purchase of EchoStar recently, their purchase by a corporation that already has its own state-mandated telephone monopoly is... "interesting" to say the least. Those of us who dislike government monopolies are left hoping either News or GE wins this one (if a sale even takes place)." One of the other suitors for DirecTV has been Murdoch's Fox.
It's amazing that a company like SBC would waste money on an investment like DirecTV. Surely they realise that it will be a losing proposition? If it happens expect to see a major write down from SBC in following 12 months.
Some people never learn.
Doesn't matter to me. Until they let DirecTV show the Big 4 networks outside of just a few markets, it is just not worth it to switch from cable and lose The Simpsons (or, insert your favorite fox,cbs,nbc,abc show).
Oh wait, they just layed off 2000 people! That should do it, and still leave enough for nice bonuses for the top dogs at SBC. And they need those bonuses becuase its getting pretty tough living on a measley $18M a year. And now they want to deregulate digital lines in Texas so that all the surviving competition can be wiped out.
If this happens, I predict DirecTV quality, value, and subscriber base will steadily decline until SBC finally dumps it at fire-sale pricing. SBC epitomizes all that is wrong with American corporations these days.
First, to clarify the present situation: GE owns Hughes Electronics/DirecTV. It is not considered a "core asset", so they desperately want to get rid of it. First, Rupert Murdoch bid on DirecTV, and planned on spinning off all of his global satellite TV assets into a new company, Sky Global, upon completion of the sale. Then EchoStar, owners of Dish Network, made an unsolicited bid that was higher than Murdoch's, and he decided not to match it. Eventually, the EchoStar-DirecTV combination was rejected on monopoly grounds, because the government (rightly so) recognized that if satellite TV assets are privately owned, there needs to be more than one owner; ideally three or more, but even two is better than one.
The SBC deal brings up a new set of problems. There is no more fear about rural consumers losing the benefits of competition, because SBC does not currently own satellite assets. However, due to having a government-approved monopoly over local telephone service, SBC has a unique advantage in that it can never die; it has a core business that practically everyone living in its target market needs, and that no competitor is allowed to offer. Thus, it can leverage its telephone monopoly to offer satellite service at a loss if its needs to, until other competitors are driven out of the market, and then drive prices back up.
There's a larger problem here that needs to be addressed, that of natural monopolies. Some services, most notably utilities that involve physical wires or pipes (water, oil, TV, phone, internet), are such that it would be absurd for two companies to compete in an open market. There is absolutely no reason why we should spend limited resources on building two sets of water pipes, or two sets of cable wires. Also, some of these services, especially oil, electricity, and water, are essential to life (modern or otherwise).
It takes the most die-hard corporate libertarian to argue that someone should be allowed to profit off basic human needs. And they'd be wrong. Municipal power companies have been enormously successful, if for no other reason than they have no profit motive; they only need to provide people with a useful service. All natural monopolies should be redesigned on that model. Whether city, county, or even state-owned, I want to see some (relatively local) level of government controlling electricity, energy, water, and telecommunications distribution.
Corporations are accountable to their shareholders. Their sole motive is to make a profit. Government is accountable to the people. Its motive is to provide for all citizens' basic needs, and (in our case) to ensure that corporations do not abuse their power. Which one would you rather control your wires?
Umm...perhaps you didn't understand the original posters assertion.
Relative to the "left" bias of some news sources, of course fox will seem to the "right"...when in reality it's rather in the center, and IMHO, with occasional right leanings.
If the political left is screwing up alot these days, what do you want them to report? That they are doing well and are correct about things? Of course they'd sound very right biased under those circumstances...doesn't mean they are.
"All part of the Satellite Home Viewers Protection Act... More like the Big 4 Network protection Act!" It has nothing to do with networks. It has everything to do with protecting local affiliates. This "protection" should not be allowed, anyway. It is like passing a law to get rid of USA Today newspaper boxes in town to protect the local newspaper.