FCC: No DBS Spectrum Cap

The Federal Communications Commission potentially made it easier for EchoStar
Communications Corp. and DirecTV Inc. parent Hughes Electronics Corp. to merge
by declining to impose a spectrum cap on the direct-broadcast satellite

If the DBS providers were to consummate their merger, the new company would
control the three most valuable orbital slots used to distribute programming to
17 million subscribers.

Opponents of the merger argued that control of all three slots violates
antitrust law.

In an order released Thursday, the FCC ruled that it would not adopt a rule
that would place ownership limits on the three slots, also called full-CONUS
(continental U.S.) slots.

'Because we continue to view DBS as offering a strong competitive alternative
to cable systems, we have not found any competitive problems with allowing a DBS
operator to operate in more than one full-CONUS orbital position and, indeed,
allowing such operation may enable DBS operators to better compete with cable
systems in the future,' the agency said. 'Consequently, we will not adopt any
restrictions on the number of full-CONUS orbital locations one satellite company
can control.'

In the same order, the FCC said it would not adopt a rule that would restrict
cross-ownership between cable and DBS operators, mainly because it has
cable-system-ownership rules under review in a separate proceeding that could
result in some kind of cable-DBS common-ownership restriction.