Advanced Television

A merger between DirecTV and Dish Network?

September 24, 2012

It is a story that simply won’t go away, and is trotted out regularly. But perennial gossip about a possible merger between arch pay-TV rivals DirecTV and Dish Network was given added fuel by a comment made at Friday’s Goldman Sachs’ Communicopia Conference by DirecTV’s CEO Michael White deserve attention.

White told analysts that consolidation could benefit consumers, and argued that soaring programming costs and carriage fees to popular channels were growing “at an unsustainable rate”.

He also added that while EchoStar was making a serious play in terms of wireless spectrum, but he doubted whether DirecTV would ever want to compete in that space, and added that it probably made more sense for DirecTV to partner with a [broadband/wireless] partner.

Also talking a merger up is Bernstein Research’s Craig Moffett, who said if Mitt Romney gets into the White House, there could be a merger proposal in the new president’s in-tray “within a year”. But even with President Obama’s re-election “we’ll bet they’ll try it before four years are out.”

Ten years ago (in October 2002) the FCC blocked a merger between EchoStar and DirecTV on the basis that any such merger would stifle competition and innovation and lead to higher prices for consumers. Today, thanks to vastly improved services from the telcos and the older-established cable MSOs, plus new entrants such as Netflix, Hulu, YouTube, Amazon and others, the competition arguments could not be made.


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