Feds sue to block satellite merger

The U.S. Department of Justice, joined by 23 states, the District of Columbia and Puerto Rico, has filed a civil antitrust lawsuit to block a proposed merger between EchoStar Communications and Hughes Electronics’ DirecTV service.

The suit follows in the steps of the Federal Communications Commission [FCC] which already unanimously rejected the merger. Following that, and trying to offset DOJ concerns, EchoStar offered concessions to cede satellite space so Cablevision Systems could create a viable satellite competitor.

That was not enough to placate the federal regulators.

“This merger would give EchoStar control of the skies for the provision of video programming by satellite, leaving customers to suffer from the resulting reduction in competition,” Charles A. James, assistant attorney general in charge of the Antitrust Division said in a news release. “This merger would create a monopoly in those areas where cable television is not available.”

The DOJ argued that EchoStar and Hughes are vigorous competitors and a merger would be unattractive.

The suit drew support from U.S. Rep. Chris Cannon, a Utah Republican who has been vocal in his opposition to the proposed $22.6 billion merger.

“By blocking this merger, the DOJ has guaranteed that no matter where Americans live they will have at least two choices in their access to television,” Cannon’s office said in a prepared statement.

It’s unclear what the opposition to the satellite merger--which now appears to be dead in the water--means to Comcast’s proposal to take over AT&T Broadband and form a massive cable TV company. A spokeswoman in Cannon’s office said she was unaware of the congressman’s stance on that merger.