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News > Deals
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Fighting for a satellite deal
Facing opposition, Hughes, EchoStar try to keep merger on track.
October 7, 2002: 5:53 PM EDT

NEW YORK (CNN/Money) - Lawyers for EchoStar Communications and Hughes Electronics have asked the Federal Communications Commission to delay judgment on their proposed merger because they are making "major revisions" to the pact.

In a letter to FCC Chairman Michael K. Powell dated Monday, the two companies did not detail these major revisions that they are apparently discussing with antitrust regulators.

But the companies may have reason to compromise. A series of published reports have said that federal regulators are poised to block the proposed purchase of Hughes Electronics (GMH: Research, Estimates) by the nation's other major satellite television provider, EchoStar Communications (DISH: Research, Estimates), amid worries that the $18 billion deal will be anti-competitive.

The companies aid they plan to submit a proposal on the deal before an Oct. 28 meeting with the Department of Justice. EchoStar and Hughes also asked for a public hearing on the matter.

The request comes as both the Wall Street Journal and USA Today report that the FCC is set to vote to block the deal, possibly this week.

The FCC is worried that the EchoStar-Hughes combination would create a monopoly over customers in areas not served by cable television, according to USA Today.

EchoStar executives have argued that combining the two companies is the only way to effectively compete with major cable television operators. Cable television has been going through its own consolidation, with Comcast Corp. (CMSCK: Research, Estimates) agreeing to buy the broadband operations of AT&T (T: Research, Estimates), the nation's largest cable television provider.

Rejection by the FCC would be a blow not only for EchoStar but for General Motors Corp. (GM: Research, Estimates), which owns Hughes (GMH: Research, Estimates), whose largest unit is the DirecTV satellite television service. GM, which faces an underfunded pension fund due to stock market declines, had expected to use proceeds from the sale to strengthen its balance sheet and make necessary pension contributions.

EchoStar faces paying a $600 million breakup fee if the deal is blocked.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.