DBS CEOs Vow Total Local Coverage Post Merger

LITTLETON, COLO.— In a move that could throw water on some arguments against federal approval of the EchoStar/ Hughes Electronics merger, CEOs of the two concerns said they will offer local TV signals to every market in the United States.

The satellite executives said on a media conference call that the recent launch of an EchoStar satellite, the proposed launches of additional spot beam satellites after the merger and the elimination of redundant programming would free up enough transponder capacity to carry some 1,650 local stations. The combined company would also carry about a dozen HDTV channels.

However, the satellite CEOs acknowledged that in some markets, consumers would be required to install multiple satellite dishes to receive local channels.

The plan would employ two spot-beam satellites currently in orbit along with several others that would be launched later. Full deployment of the service would be reached about two years after a merger is approved at a cost of more than $300 million.

Despite the cost, EchoStar CEO Charlie Ergen said the initiative is necessary and makes practical business sense because high subscriber-growth numbers generally follow in markets that get local TV service via satellite. They also suggested a national local coverage plan would be necessary, whether or not the merger is approved, although it would only be possible with a merger of the two companies' spectrum.

"We can't be competitive to cable until we can provide local signals to all Americans," said Eddy Hartenstein, DirecTV chairman.

The move would apparently assuage one powerful critic — the National Association of Broadcasters (NAB) — which said soon after the announcement of the proposed merger that it should be stopped unless the resulting satellite company agrees to carry 100 percent of the nation's local TV channels.

The NAB said it would thoroughly scrutinize the plan before reconsidering its opposition to the merger.

However, other groups including the National Rural Telecommunications Cooperative (NRTC) continue to fight the plan for eliminating competition in the satellite field, leaving rural TV subscribers at risk of price gauging.

To counter some of that argument, Ergen formally announced his "One Nation, One Rate Card" pledge to charge all U.S. consumers the same rate for local TV signals, regardless of where they live. Rural customers, who are billed through DirecTV redistributors like the NRTC or Pegasus Communications, still may be subjected to programming stipends imposed by those middlemen, however.

In other news, EchoStar announced that DISH Network added approximately 400,000 net new subscribers during the quarter ended Dec. 31, 2001. DISH Network had approximately 6.83 million subscribers as of Dec. 31, 2001, an increase of approximately 30 percent over Dec. 31, 2000, and passed the 7 million customer milestone during February 2002.