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To: Sawtooth who wrote (4925)	11/30/1998 3:13:00 PM
From: Rick Hudson	Respond to of 10852

Monday November 30 2:43 PM ET EchoStar Buys News Corp., MCI Satellite Assets By Jessica Hall NEW YORK (Reuters) - Digital broadcast satellite company EchoStar Communications Corp., in a bid to better compete against cable television, Monday agreed to buy satellite assets owned by News Corp. Ltd. and MCI WorldCom Inc.for about $1.2 billion in stock. By combining the capacity of the newly acquired satellites with its current satellites, EchoStar will become a stronger competitor against cable TV -- with the ability to broadcast to the entire country and provide more than 500 channels on its DISH Network, which currently has about 200 channels. ''This agreement provides EchoStar with an opportunity to offer consumers an alternative to rising cable prices and poor cable service,'' EchoStar Chairman Charlie Ergen said. ''It also strengthens EchoStar's efforts to provide local network channels for consumers who live in areas that don't get a reliable picture from a conventional off-air antenna,'' he said. The deal will also allow EchoStar to provide Internet and data services. The agreement comes nearly two years after a similar deal between EchoStar and News Corp. soured and about six weeks after News Corp. and MCI WorldCom abandoned a deal to sell their satellite assets to Primestar Inc., the satellite television service owned by a group of cable TV operators. Under the new deal, EchoStar will acquire a direct broadcast satellite license, two Loral Space & Communications Ltd (NYSE:LOR - news). satellites under construction, and a direct broadcast satellite uplink center located in Gilbert, Ariz. EchoStar also will receive a worldwide license agreement to manufacture and distribute set-top television boxes internationally, and a three-year agreement to rebroadcast Fox Network local station signals to their respective markets. EchoStar also agreed to broadcast the Fox News Channel on its DISH Network. Media giant News Corp. will get 24 million new EchoStar shares and telecommunications company MCI WorldCom will receive 5.9 million shares, giving the two companies a 37 percent equity stake in EchoStar. Based on the price of EchoStar's stock Monday, the deal is worth about $1.163 billion. Shares of EchoStar, the third-largest U.S. digital broadcast company, rose $3.875 to $38.875 on Nasdaq. The deal ends two years of debate and uncertainty over the satellite slot, one of only three suitable for direct broadcast television transmission to the United States. News Corp. and MCI acquired the slot in a 1996 government auction, but the companies feuded and decided to sell the satellite assets instead of offering their own direct broadcast service. News Corp. then agreed in February 1997 to pay $1 billion in cash and assets for a 50 percent stake in EchoStar. Together, the companies had planned to form a direct-TV satellite venture but the deal immediately soured and the companies have been mired in legal battles and finger-pointing ever since. The new deal now ends those battles and the litigation between EchoStar and News Corp. will be dismissed once the deal closes. After the original EchoStar deal unraveled, News Corp. and MCI agreed to sell some satellite assets to Primestar. They abandoned that deal in October under pressure from the Justice Department, which had filed an antitrust lawsuit to block the deal. The Justice Department feared Primestar and its cable owners would use the satellite slot to blunt the competitive threat that direct broadcast satellite services pose to land-based cable service. EchoStar, which had criticized the Primestar proposal, championed the new agreement as a benefit to consumers and a boost to competition against cable television.