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Technology Stocks : Echostar Comm.

SATS 68.66

+2.1%

3:59 PM EST

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To: Noel who wrote (770)	4/30/1998 2:44:00 PM
From: Goodboy	Read Replies (2) of 1394

Primestar is negotiating a consent decree as we speak with the Department of Justice. The FCC has no major issue with the deal besides programming access and cable owning DBS. DOJ will approve transaction in the next 4 to 6 weeks followed by the FCC. Echostar's argument on program access holds no water. FCC already has general rules in place and are forcing (in a recent decision) News Corp. to deliver the FX channel to Echo or face regulatory fines and sanctions. This means denying the deal based on that premise would be foolish. To believe that Primestar will grab DBS slot and hold it hostage so that more people won't switch to satellite is silly and absurd. They have now over 3 million subs and will be an independent public company (part of the consent decree will be to have independent board approving marketing and strategic plan. They will market agressively and JD Power ranks them #1 in customer satisfaction. They will have over 200 channels (more than Echo) and a lease or buy option. They will price their hardware lower and be agressive on program packages. They will be in Radio Shack and soon in many other retailers competing directly against Echo and Direct TV. No wonder Charlie and Hughes are trying to get the government to stop this deal. Primstar is going to be one tough competitor. If they weren't, the market would be open to just Direct TV and Echo alone. Charlie didn't have to much of a problem when it was him and AskyB merging. Now that was anti-competitive. A duopoly with ECHO owning nearly 2/3 of the DBS full Conus spots. Now we will have 3 players each on somewhat equal footing for the consumer to choose from. DBS doesn't bring down cable prices because it is still more expensive. Primestar will be hurting ECHO and Direct TV within 3 months.

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