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DBS Dealers Debate 'The Deal'

As satellite dealers from across the country meet later this week at the annual Satellite Broadcasting & Communications Association trade show in Las Vegas, one hot topic of conversation is sure to be the proposed merger of EchoStar Communications Corp. and Hughes Electronics Corp., which is pending regulatory approval.

Most retailers interviewed recently figured odds on the direct-broadcast satellite merger getting the government go-ahead are only about 50-50.

But individual views as to whether or not the merger should happen were a bit more one-sided. Some voiced strong opposition on antitrust grounds, while others argued that the merger would offer more programming options and competition to cable.

A DBS merger would eliminate spectrum duplication and offer more bandwidth for high-definition television and interactive TV, Sky Web Inc. president Greg Frasca said.

The ability to provide local broadcast signals to all markets is another benefit. New Jersey-based Sky Web delivers local channels from the New York City DMA. Local consumers who lost off-air reception last Sept. 11 were able to get those signals via satellite.

The SBCA has publicly supported the merger. But not all retailers are optimistic about the deal's benefits.

"I will go out on a limb and say I think the merger is bad for the consumer, bad for the industry and bad for our beloved trade association," said Davis Antenna owner Buddy Davis. He said that consumers and dealers will have fewer choices of DBS companies to do business with, and that the SBCA will receive membership dues from one large DBS provider rather than two.

Davis sells both service from both Hughes's DirecTV Inc. and EchoStar's Dish Network.

Chuck Abbott, president of Abbott's Audio & Video in Las Vegas, said having one DBS platform would remove consumer confusion from the marketplace. Consumers would benefit because all of their programming options would be available on a single platform, he added.

Abbott doesn't believe that EchoStar could afford to alienate all its dealers and installers after a merger, because there's too much at stake if the dealers fail to provide proper service to consumers.

"The cable companies are coming onto the scene, and they are taking care of the dealer," he said.

The audio and video shop is partnering with Cox Communications Inc. to help promote newly launched high-definition television service in Las Vegas.

Via Satellite Inc. president Jeff LeHew, a Dish Network regional service provider, supports the merger in large part because Ergen and his team are involved.

"My gut feeling tells me these guys make things happen," LeHew said. "My money is on Dish."