Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Echostar Comm. -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (1350)	10/29/2001 2:22:58 AM
From: highestlance	Read Replies (3) \| Respond to of 1394

You may want to wait a little bit... I think Sir Rupert might have made a brilliant move here by avoiding a bidding war and letting Echostar "get" Hughes. If the FTC blocks Echostar's purchase of Hughes then Murdoch will be able to swoop in and get it at a much better price -- certainly less than the Echostar bid. I think that there is a very good chance that the FTC will block the merger. The law is very clear on not allowing a combination that would result in 100% market share in the US. This whole case hinges on one question: for purposes of this merger, what is the definition of the "market." If the market is satellite-delivered TV then there is absolutely no legal way that Hughes-Echostar can be combined. If instead, the market is defined as multichannel TV (cable and satellite) then the merger is legal, but the FTC could still ask Echostar for special concessions. The five FTC commissioners individually get to decide what they think the proper definition of the market is for each case. Ideally the FTC would make purely legal and scientific decisions, but in a case as big as this one it becomes a political decision more than anything. The FTC commissioners (and their staffs of lawyers and economists who analyze cases and make recommendations to the commissioners) can be lobbied, but there are powerful interests on both sides of this issue. As an uninterested party it seems pretty clear to me that satellite TV is a distinct market from multichannel TV because there are so many rural consumers for whom satellite is the only possible product they can consider. Echostar will argue that satellite and cable extensively overlap and that the combined Hughes-Echostar would be smaller than AT&T Broadband. This should be an interesting one to watch...