DirecTV, Echostar (Dish Network) to merge?

July 20, 2006

Echostar, DirecTV shares rise on deal prospects

NEW YORK -- The shares in the two leading satellite television
operators, DirecTV Group Inc. and EchoStar Communications Corp., rose

Mark Lloyd...

Separate boxes WOULD be better. The problem now is that no standalone
DVRs have a simple, general-purpose HD INPUT. You'd be left with no
way to use the DVR on HD shows (in HD quality).

Actually, you might be able to accomplish something if you had an ATSC
modulator. Are those available at reasonable prices? Probably not.

Thomas T. Veldhouse...

The DVR that DirecTV currently offers for HDTV has two high definition DirecTV
tuners (which do standard definition as well) and two ATSC tuners in it to
record locals off of the air. Don't forget the wonderful Tivo software.

Jack Zwick...

They only record DIGITAL locals. HD or SD.

cjdaytonjrnospam...

You just answered your own question.

Thomas T. Veldhouse...

That's what I said! They are DirecTV tuners [which are digital by default]

not...

And thats a problem? I'd prefer to watch the digital versions of my locals
anyways.

Mark Lloyd...

DirecTV is all digital, no default.

and ATSC is for high definition, which is digital by default.

Gary Tait...

No You said HDTV tuners. You may have meant to say ATSC (the proper
nomenclature), but saying the OTA tuners are HD is just plain incorrect to
say. ATSC can be used for High Definition, but nobody is saying it has to
be. ATSC fundamentally just means digital.

cjdaytonjrnospam...

You got that backwards. ATSC is for digital, and if there is a high definition signal it will decode that, which is digital by default.

Mark Lloyd...

The OTA tuners seem to be ATSC ONLY. No NTSC capability.

Sounds like you've heard of analog ATSC broadcasts.

strongly Wednesday as analysts gave credence to the possibility of a
merger between the two companies. EchoStar shares rose by as much as

tkgoogle...

I don't see it happening.

1. Little has changed since the last attempted merger, and they really
haven't made a good faith effort to transition to new tech.. (Some
new sat's.. that's about it.)

Cold Coffee...

If I remember my timeline correctly, FiOS TV was not "live" when the first
merger attempt occurred.

This might be considered more than a "little change" in the industry.

John Lodge...

Coffee,

Okay, but Fios is available to roughly 5 percent of the US. That is NOT
much of a change. FIO's will take years to be available to even 50
percent of the US.

Cold Coffee...

I'll concede that point. Additionally there will be areas that will never
see FiOS. However, with regards to the merger, a case can be made that
Verizon will become a viable competitor in the TV media delivery business
and the satellite companies' one defense is to combine resources.

Thomas T. Veldhouse...

Bob...

Rapidly is a fair assessment. SBC just acquired AT&T and changed the name of
the whole thing to AT&T.

SBC was already pretty big.

That's a pretty substantial "regional" operation.

Don't forget AT&T. They are also delivering fiber to the home. They even
have an agressive interim solution that involves combining a dsl modem with a
Dish Network receiver.

Anim8rFSK...

They're such a lousy company now. I signed up for the $5 a month long
distance, which actually costs $13! It took me months to cancel it
(they kept saying they would and just wouldn't) and when they finally
did, charged me a bunch of money to do so. I wouldn't deal with them
again, period.

Mark Lloyd...

I guess the "new AT&T" isn't really any better than the old one. I
know someone in an area that used to be served by "Southwestern Bell",

Thomas T. Veldhouse...

That amounts to 22% of the consumer telecom spending and 34% of the business
telecom spending; according to this article:

Yes, it is big. A monopoly? No. Rapidly becoming one? No, not without
further aquisitions.

UCLAN...

Can't be a monopoly in many areas. Digital phone service via Cox Cable
is growing rapidly in this area. Long distance, local, all the bells
and whistles as Ma Bell, but much cheaper. And it uses the same phone
and internal phone lines as before. One can even keep the same phone
number (a $5 fee, but often waived.)

Jude Cormier...

And when it acquires BellSouth, what will be then? (I'm asking seriously,
not being sarcastic)

Thomas T. Veldhouse...

The aquisition needs to be approved. If there is a risk of a new monopoly
forming, then I doubt it will be approved. Personally, I wish Verizon would
buy QWest, to put some life back into the old dusty relic. There are big
players in the industry, and most of them are descended from the AT&T of old
[pre-breakup]. Thus, I do not fear [yet] that they are growing towards a
monopoly.

Bob...

The new AT&T company is the largest telecommunications company in the
country and one of the largest in the world.

Thomas T. Veldhouse...

That isn't in doubt.

Doesn't have to be a monopoly to be dominant. Which I think was the point.

Thomas T. Veldhouse...

Actually, he indicated that it was growing toward being the AT&T of old and
followed by a mention of its monopoly and previous breakup. Is there
something wrong with my questioning of that statement? I don't believe there
is a risk of monopoly at this time as there are still many competitors and
quite a bit of room for consolidation.

Bob...

Nothing wrong with questioning it but I don't think that was his point. I
think we all realize a monopoly is unlikely.

I didn't take his point so literally. More to the point that they are
growing and becoming the dominant player in the game, very much as the old
AT&T was.

Your classifying AT&T as being only regional was off the mark.

Thomas T. Veldhouse...

I think that Verizon makes an excellent counter to them. In fact, Comcast
also makes a decent counter to them [although they do not sell backbone
connections]. AT&T and Verizon are largely bound to a region, except where
their Internet connectivity is concerned as backbone providers, and Comcast
[and others] are able to compete with them on their own turf. This is the
reason I indicate they are regional. AT&T won't be coming to Minneapolis and
competing with QWest anytime soon.

Jude Cormier...

okay, maybe rapidly wasn't that right word.

and doesn't like the fact that it's now AT&T.

I had trouble with AT&T wireless. They canceled the wireless service I
had had for a little over a year, but forgot to cancel the billing. I
called again (and had to say exactly the same thing to about 6
different people). Next month they gave me a credit... as well an next
month's billing. I had to call again, saying exactly the same things
as before to several more people.

BTW, I had no trouble quitting AOL (except they required a single
fax).

Dish is just starting to deploy mpeg-4 receivers and has a long way to
go. Meanwhile Directv is stuck in the past with little new tech.

2. Any merger would require replacing at least one of the company's
customer receivers.. probably both, no cost savings their... while
adding huge amounts of debt.. (Guess who get's to pay tor that debt?).

3. Right now they only thing keeping DBS prices in line is the
competition between DBS providers.. (Cable isn't part of that picture).

4. At best, a merger doubles the available bandwidth in five to ten
years. Which represents a poor choice (for improving services), since
they've barely scratched the surface when it comes to newer compression
protocols & spot beam tech.

5. Local (H)DTV service delivered by Sat's is at best a mostly
redundant service. 8VSB transmission of (H)DTV is far superior to the
old NTSC system and receiver tech has made significant progress..

Jude Cormier...

thanks for your input. I find it interesting how some of the players of old
are being revived as new players in today's very competitive telecom
industries.

Thomas T. Veldhouse...

I think they are much different companies than they were.

====

6. They would be better off asking the FCC it they could co-operate on
delivering the (H)DTV local's via some common sat and decoding tech.
(Local's consume a majority of each companies transponder capacity.)

Except for the occasional blacked out sporting event, there is no
compelling reason to encrypt local TV service spot beams, OTA (H)DTV
broadcaster signals already radiate 60 to >80 miles from terrestrial
antenna tower. Encryption of any blacked out event could be
accomplished using a low tech one time cypher.

3.25% to close at $33.08 on the Nasdaq, while DirecTV rose 2.4% to
close at $16.88 on Wednesday. Citigroup on Wednesday reversed its
rating on EchoStar shares to a "buy" from a "sell" on the possibility
the two sides were closer to discussing a deal last abandoned in 2002.
"Our upgrade does not reflect a change in our fundamental view of the
DBS (satellite) industry," wrote Citigroup analyst Jason Bazinet in a
research note. "Rather, it reflects our belief that there is a greater
chance that EchoStar and DirecTV may attempt to merge." (Reuters)

=====

If they dump the LOUSY and recently hacked Nagravision 2 encryption,
they can eliminate satellite signal theft (hacking). Puts Bell
ExpressVu in a spot to be THE source for hacking since they use the
same equipment and it also puts them way in the middle of nowhere when
it comes to new technology, because I think a DirecTV/Dish Network
merger would have them using DTV's equipment/encryption.