FCC stops clock on EchoStar-DirecTV review

Claiming it is unable to obtain necessary information, the Federal Communications Commission has halted its review of EchoStar’s proposed merger with DirecTV at day 77 of a 180-day process. The review will resume when the FCC receives the information it is seeking, said FCC Spokeswoman Michelle Russo.

“We sent them a letter on Feb. 4 requesting further information that we needed for our review and gave them a deadline of March 6,” said Russo.

That letter sought data on revenues, program distribution, various packages the two satellite providers offer and high-speed Internet services.

“On March 5, they filed a letter asking for an extension of 15 days,” said Russo. While some information was received by that point, the FCC denied the request “and we have stopped the clock because we can’t proceed with this review.”

The combination of the two largest direct broadcast satellite (DBS) providers is valued at $26.3 billion and would affect about 16.7 million subscribers. The FCC’s action effectively stops a governmental process EchoStar had been hoping to complete by the end of the year, potentially gumming up finalization of the merger.

In another matter, the trade group Satellite Broadcasting and Communications said EchoStar had joined it in asking the U.S. Supreme Court to review a lower court ruling requiring carriage of all local broadcast stations in markets where EchoStar carries one station.

In a prepared statement, SBCA President Andy Wright called must-carry “unconstitutional and anti-consumer” because “it favors certain local broadcasters over others, and it penalizes direct broadcast satellite providers for carrying popular stations by forcing them to carry every station without monetary compensation.”

The SBCA argued further that the Supreme Court’s 5-4 ruling against must-carry was not applicable to DBS operators.

“It concluded cable was a bottleneck monopoly wielding enormous market power and had anticompetitive reasons for refusing to carry popular broadcast stations as a result of its vertical integration with programmers and its competition with local broadcasters for local advertising dollars,” Wright argued in his statement.

Neither point, he said, is applicable to DBS. Russo said the FCC does not comment on litigation.