Satellite Pawn

Since the FCC and Justice Dept. rejected a deal to merge the US’s only two direct-satellite broadcasters, DirecTV and Echostar, DirecTV has been back on the block looking for a buyer. Rupert Murdoch’s News Corp has expressed interest in adding DirecTV to its inventory of European and Asian direct-broadcast satellite holdings.

But last Friday the New York Times reported that mega-baby-bell SBC is in talks to buy DirecTV. SBC is perhaps best know for their taking over midwestern baby-bell Ameritech, slashing jobs and ruining overall customer service. However, Reuters reports that Wall Street analysts aren’t so hot on such a deal, saying that SBC would have to over-extend itself. Of course, I think it would just end up with DirecTV having even shittier customer service.

According to the AP, News Corp says they won’t get into a bidding war with SBC to buy DirecTV, since they bowed out of the race earlier when their opponent was Echostar. So, maybe Murdoch and Co. will have their eyes on Echostar/Dish Network instead.

So, why is this important? At the moment direct broadcast satellite TV is a competitor to cable TV and neither of the big players is otherwise in the production or cable business — so you have something resembling competition there. But News Corp owns FOX and tons of cable channel properties, so owning a satellite company would give News tremendous leverage to promote its own channels over competitors. Imagine a world where FOX News was free, but CNN was another $10 a month.

SBC, on otherhand, is a ruthless telecomm powerhouse that is increasingly threatened by cable, especially since cable companies have rolled out lots of digital infrastructure for high-speed internet, digital cable and even phone service. SBC would love nothing more than to be able to put the squeeze on cable from the TV side and offer packages of satellite TV, phone and Internet pricing cable out of the picture.

Of course, the big picture is that the big just want to get bigger, and more monopolistic. Competition is actually anathema to the big corporate communications conglomerates — they’ll pay lip service to it so long as it keeps the public and regulators off their backs. But do not mistake, given the narrowest opportunity they’ll buy or drive their competitors out of business, and leave the public holding the bill.






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