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Cable deal argued
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December 20, 2001: 5:23 p.m. ET
EchoStar chief says deal argues for his Hughes buy; AT&T union opposes deal.
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NEW YORK (CNN/Money) - The proposed purchase of AT&T Corp.'s cable operations by Comcast is another argument for allowing the two major U.S. satellite television providers to merge, according to the CEO of one of those companies.
Charlie Ergen, CEO of EchoStar Communications Corp., said that his company's proposed $26 billion cash and stock purchase of Hughes Electronics is needed to balance the new cable television provider that would be created through the proposed cable deal.
"This further consolidation among cable companies illustrates why the pending merger of EchoStar and Hughes Electronics is essential," said Ergen. "Simply put, the EchoStar/Hughes merger is the best hope to create the efficiencies necessary to compete effectively against these cable behemoths. When completed, the proposed EchoStar/Hughes merger will create effective competition to these dominant and entrenched cable companies."
EchoStar runs the Dish network, the nation's No. 2 satellite television system. Hughes, a unit of General Motors Corp., operates DirecTV, the nation's largest satellite television provider.
AT&T Broadband is the nation's largest cable operator while Comcast is the No. 3 provider. Together they have about 22 million cable customers, compared with about 16.7 million satellite television customers at EchoStar and Hughes.
The AT&T-Comcast deal drew criticism Thursday from the Communications Workers of America, the union that represents 28,000 AT&T Broadband employees and 500 more at Comcast. The union expressed concern about Comcast's labor relations record, charging the company has fought union organizing efforts.
"Cable workers have only recently begun unionizing, and to date this segment of the communications industry lags far behind industry standards in such areas as health benefit coverage, safety and health protections and educational opportunity," said the union statement. "The impact of the merger on workers and job conditions in this industry should be a major concern of regulators."
The union also questioned whether the debt that AT&T accumulated from the purchase of cable providers that formed AT&T Broadband will be unfairly left with the company's remaining long-distance units. It said that CWA members collectively own about 5 percent of AT&T stock.
The union also said it was concerned approval of the deal would lead to further consolidation among cable, digital satellite and telecom companies. 
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