JUSTICE DEPT. JOINS SUIT TO BLOCK SATELLITE TV MERGER

Says Deal Between Dish and DirecTV Would Eliminate Competition

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WASHINGTON (AdAge.com) -- The Justice Department today formalized its opposition to the proposed $18.9 billion merger between the Dish Network and DirecTV by joining a number of states to file a civil antitrust suit in Washington to block the deal.

Dish, controlled by EchoStar Communications Corp., and DirecTV, controlled by General Motors Corp. unit Hughes Electronics Corp., together serve about 18 million U.S. subscriber households. Their merger would create the nation's largest satellite TV company.

The suit charged that EchoStar's acquisition of DirecTV would eliminate competition between the two and would "substantially" reduce competition in the multichannel video programming arena.

'Customers to suffer'
"This merger would give

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EchoStar control of the skies for the provision of video programming by satellite, leaving customers to suffer from the resulting reduction in competition," said Charles A. James, assistant attorney general for antitrust.

He said the merger would create a monopoly in areas without cable.

The Justice Department on Oct. 10 said it opposed the EchoStar deal but had continued negotiating in hopes of restructuring the deal in a way that could create another satellite competitor.

The Justice Department statement today said that even if the proposal was realized, "it was unlikely to become a sufficient replacement for vigorous competition that now exists between Hughes and EchoStar within a reasonable period of time."

The Federal Communications Commission had scuttled the deal on Oct. 10. The two media companies had 30 days to file an amended merger plan.

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