Dish Network Tells FCC to Reject Comcast, AT&T Mergers

Dish executives took six meetings at the FCC to say the Comcast/TWC merger should "be denied" and it has "concerns" about AT&T's bid for DirecTV.

Comcast merger

Dish Network executives paid a visit to the Federal Communications Commission July 7 to express their concerns about the pending mergers of Comcast and Time Warner Cable (TWC) and AT&T and DirecTV.

In a July 9 filing summarizing its six meetings (no more than two FCC commissioners can be in a private meeting, due to the Sunshine Act), Dish said it discussed the "changing nature of the pay-TV and broadband industries in light of growing industry consolidation" and explained that the FCC's response to these mergers will affect the ability for Dish and other non-dominant players to compete in the broadband and video markets.

Given the "serious competitive concerns" the Comcast deal creates, the deal "should be denied," Dish told the FCC.

"High-capacity cable broadband connections are the lifeblood of over-the-top (OTT) video services," Dish said in its filing. "Among other things, the combined company would have an increased incentive and ability to leverage its control over the broadband pipe to undermine these services."

The combined companies would have at least three "choke points" in the pipe where it could "foreclose the online video offerings of its competitors," Dish continued: the "last mile" reaching the consumer; the "interconnection point"; and at any specialized service channels where "high speed lanes" are offered.

Further, it went on, the pair "will be able to exercise its enormous size to leverage programming content in anti-competitive ways" such as creating price pressures. The company could force some programmers to lower prices for consumers, which would force those programmers to look to make up lost revenue from smaller pay-TV providers such as Dish.

Additionally, Dish went on, the combined companies could have the "incentive and ability to restrict programmers' ability to grant digital rights to competing pay-TV and OTT video providers."

Regarding AT&T's hope of purchasing DirecTV, Dish used gentler terms, saying it has "concerns" that the two could use their joint marketing power to leverage programming to the "potential detriment of consumers."

Technology Business Research analyst Chris Antlitz expects Dish would like for itself the kind of deal DirecTV has found, and surely Dish Chairman Charles Ergen suggested as much during Dish's failed bid to merge with Sprint last spring.

Just as AT&T and DirecTV plan to make mobile video more accessible from any device, Ergen had said that Sprint and Dish could create a "very unique, powerful company," offering something on a national scale that no other one company had managed before.

"Typically, when we see consolidation like this, the companies not directly involved will throw a hissy fit," Antlitz told eWEEK. "But at the end of the day, they want very much to be in the same position."

The key reasons for wanting a merger, he added, "is for the cost synergies. It enables them to enter new markets or bring new services to market that they couldn't have by themselves. It's typical industry stuff."

In addition to meeting with FCC Chairman Tom Wheeler and each of the other four commission members, Ergen and others met with Roger Sherman, the chief of the Wireless Telecommunications Bureau who was recently made a member of the steering committee to which "working groups" chosen to review the mergers will report.

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