spacetoday.net: EchoStar tries to salvage merger by creating new competitor

Posted: Tue, Oct 29, 2002, 8:00 AM ET (1300 GMT)
Satellite TV company EchoStar is trying to salvage its proposed merger with DirecTV by helping a rival company create its own satellite TV service. Several publications reported Monday that EchoStar has promised to provide considerable support to Cablevision in that company's efforts to create its own satellite TV service that would compete against the merged company. EchoStar has reportedly offered to transfer 51 frequencies to Cablevision, as well as sell its EchoStar 3 satellite and lease the EchoStar 1 and 2 satellites. Cablevision is already planning to launch its own direct TV satellite, Rainbow 1, in early 2003. EchoStar hopes that by helping create a new entrant in the satellite TV market it will win over both the US Justice Department and the FCC, who must approve the merger. The FCC announced its opposition to the merger earlier this month, while EchoStar and DirecTV executives met with antitrust regulators at the Justice Department on Monday.