Satellite TV Deal: Fewer Viewer Choices?

Ergen made a point today of listing some specific reasons why he thinks consumers will benefit, claiming EchoStar has "always been rated higher in customer service" than cable companies, and "can provide broadband [Internet service] to every single home in the U.S. at a cost competitive with what they get from cable or DSL."

But Foer, for one, rejects the argument that competition between satellite and cable outlets will benefit consumers — especially since most cable companies have local monopolies.

"For most Americans, it's a merger from three competitors to two," Foer says, meaning that instead of two satellite companies pitted against cable companies, it will just be EchoStar versus the cable providers. "In rural markets, it's not even a duopoly, it's a monopoly."

With two competing satellite companies, he says, "The costs will keep coming down … but if you've got one competitor going against cable, they'll just price a little bit lower than cable."

Foer adds: "We tend to think that the country's going to be better off if you have two satellite systems going after each other."

It is not certain how long the federal antitrust review process will take, but with entry into the satellite arena by a new company considered unlikely in the near future, the potential coupling of the industry's two giants means the matter will almost certainly be scrutinized closely.

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