New York, Oct. 8: Scrambling to save their proposed merger from rejection by regulators, EchoStar Communications and Hughes Electronics urged the Federal Communications Commission on Monday to delay a decision on the $ 26-billion deal.
The companies sent a letter to the FCC’s chairman, Michael Powell, asking him to postpone the agency’s decision so that they could make “major revisions” to their proposal. The FCC had been expected to reject the deal in the next few days.
EchoStar, the owner of the Dish Network, and Hughes, a unit of General Motors, said they planned to send a revised proposal by October 28 to the justice department and requested that the FCC delay making a decision until after its new proposal is submitted. If the FCC rejects the deal before the justice department has time to act, the proposal would be effectively scuttled.
Both the FCC and the justice department are preparing to recommend against the deal, according to executives briefed on their plans, contending that the combination would stifle consumer choice by reducing competition in most areas from three companies—the two satellite providers and a cable television company—to just two, while in rural areas not served by cable it would eliminate competition entirely.
Efforts by EchoStar and Hughes to stall a decision by the FCC so that they can try to adjust their merger proposal were an acknowledgment that the deal was going to be rejected, said Gene Kimmelman, co-director of the Consumers Union, a consumer advocacy group. “Obviously, they have their backs against the wall,” he said.
EchoStar, which has argued that the deal should be approved because it was the only way to compete effectively against increasingly large cable television companies, is now planning to consider options, like selling some of its spectrum or allowing another company to resell its services, that were once unthinkable to its chairman, Charles W. Ergen.