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 FOR  IMMEDIATE  RELEASE  October  10,  2002  NEWS  MEDIA  CONTACT:  Emily  Willeford  at  (202)  418-  2100 
 PRESS  STATEMENT  OF  COMMISSIONER  KEVIN  J.  MARTIN  ON  PROPOSED  MERGER  OF  ECHOSTAR  AND  DIRECTV 
 I  support  today’s  decision  not  to  approve  this  merger  because  of  the  potential  anti-competitive  impact  on  consumers,  particularly  those  consumers  in  rural  America.  In 
 addition,  as  I  explain  below,  I  would  have  set  this  merger  for  hearing  on  an  additional  ground  and  therefore  dissent  in  part. 


 Generally,  I  believe  competition  is  the  most  effective  means  of  delivering  choice,  innovation,  and  affordability  to  consumers.  Today,  approximately  85%  of  consumer 
 households  receive  their  television  programming  from  a  multi-  channel  video  programming  distributor.  The  vast  majority  of  those  consumers  have  only  two  or  three 
 providers  from  which  to  choose.  Cable  rates  have  continued  to  rise;  indeed,  the  Consumers  Union  recently  reported  that  cable  rates  have  increased  36  percent  since  1996. 
 Particularly  in  this  environment,  the  Commission  must  be  wary  of  taking  action  that  would  decrease,  not  increase,  competition  in  this  market.  As  the  attached  Order 
 concludes,  the  potential  harm  to  competition  from  the  merger  as  proposed  outweighs  the  potential  benefits. 


 I  note  that  the  Commission’s  Order  provides  the  companies  with  30  days  to  amend  their  application  to  include  major  revisions  designed  to  address  the  anti-competitive 
 impact  of  their  proposed  merger.  For  example,  some  parties  have  suggested  that  the  applicants  could  divest  some  of  their  spectrum  in  a  manner  that  would  enable  a 
 new  DBS  provider  with  more  efficient  technology  to  compete  nationally  against  a  merged  EchoStar/  DirecTV.  These  two  new  DBS  providers,  it  is  argued,  could  provide  all 
 consumers  with  their  local  broadcast  stations  and  thus  serve  as  stronger  competitors  to  cable  than  EchoStar  and  DirecTV  do  today.  This  idea  is  interesting,  but  the  applicants 
 have  made  no  such  proposal.  If  the  applicants  were  to  request  such  a  structural  remedy,  it  could  merit  further  review  as  to  its  technical  and  economic  feasibility.  Failing  to  fully 
 explore  such  options  could  be  a  missed  opportunity  to  bring  more  competitive  choices  to  consumers. 


 Finally,  as  I  explained  in  a  detailed  press  statement  last  April,  I  believe  EchoStar  currently  is  violating  the  must-  carry  provisions  of  the  Satellite  Home  Viewer 
 Improvement  Act  (“  SHVIA”)  and  FCC  rules  by  placing  some  broadcasters’  signals  on  a  second  dish.  I  continue  to  be  concerned  about  the  burden  this  practice  places  on 
 consumers  and  the  impact  this  discrimination  may  have  on  some  broadcasters—  particularly  public  broadcasters.  I  therefore  dissent  in  part,  on  the  majority’s  decision  not 
 to  include  EchoStar’s  compliance  with  its  must-  carry  obligations  among  those  issues  designated  for  hearing. 
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