Letter from Rep. Rick Boucher (D-VA) to Attorney General John Ashcroft.
Re: Department of Justice review of the Echostar Directv merger.
Date: October 28, 2002.
Source: Office of Rep. Boucher.

October 28, 2002

The Honorable John Ashcroft
United States Attorney General
Department of Justice
700 Pennsylvania Ave, NW
Washington, D.C. 20554

Dear Attorney General Ashcroft:

I am writing to ask that the Department of Justice favorably examine the revisions to the proposed merger between EchoStar Communications Corporation and Hughes Electronics Corporation. The applicants have recently proposed major revisions, including structural remedies to address competitive concerns, and I would ask that the Department consider seriously these revisions given the potential for increased benefits to consumers, particularly in rural communities and small media markets.

As you are aware, the merger proponents promise improved spectrum management, increased access to local broadcast stations and universal access to broadband services. This is particularly noteworthy as the Satellite Home View Improvement Act ("SHVIA"), passed and signed by the President in 1999, paved the way for Direct Broadcast Satellite ("DBS") customers to receive, for the first time, local broadcasts over satellite.  The more efficient use of spectrum that will result from the merger is likely the only way to affect the goals of SHVIA for all 210 designated market areas (DMAs). Even the FCC acknowledges that separately the companies are not likely to reach the entire US population, leaving many of the nation's rural residents without access to local television service via satellite.

On the other hand, the critics of the merger as originally filed argued that the merger would have reduced competition in the DBS video market, harming consumers. The FCC has rejected the merger, providing 30 days for restructuring the proposal. It is my understanding that revisions proposed by EchoStar and DirecTV include the divestiture of spectrum to Rainbow DBS, a facilities-based DBS competitor. With the addition of these channels, Rainbow DBS proposes to provide expanded service to consumers, maintaining a competitive environment in the post-merger DBS market. In addition, both post-merger providers propose to deliver local broadcasts to all 210 DMAs, a major improvement over the current situation.

Robust competition in the multichannel video programming distribution marketplace is certainly a consideration when considering the proposed merger, and a revised merger application that facilitates the existence of two facilities-based DBS competitors would appear to serve that goal while preserving the merger's obvious potential benefits. I hope you will give the revised merger plan every consideration.

Thanking you for your attention to this matter, I remain with kind regards