EchoStar, DirecTV deal on shaky ground

Time may be running out on the proposed merger of the nation’s two largest direct broadcast satellite [DBS] providers, EchoStar and DirecTV, with a Jan. 21 “drop dead date” looming if the deal is not approved by regulators.

The deadline was announced at the Satellite Broadcasting and Communications Association [SBCA] meeting yesterday in New York, with DirecTV Chairman CEO Eddy Hartenstein quoted as stating the companies “would go our separate ways” if there’s not closure at that point.

There were already rumblings that the FCC was ready to nix the deal. The two DBS players tried to stave off that possibility by requesting “structural remedies” and asking the FCC to wait until the Justice Department made a determination. The FCC has made no public response to the request.

While the DBS players have maintained that they must combine to battle cable television, the attempt to salve regulators could, ironically, benefit cable. If EchoStar were to sell off some of its spectrum to a third party to create another satellite player, Cablevision Systems might be the buyer.

Cablevision wants a chunk of EchoStar’s spectrum to start a competing satellite service after it launches its own satellite into orbit next March and has asked the FCC and Justice Department to order EchoStar to sell it some capacity.--Jim Barthold, senior editor