ECHOSTAR-DIRECTV RAISES CONCERNS WITH HILL LEADERS

“My committee is extremely concerned about this proposed merger,” said House Judiciary Committee Chmn. Sensenbrenner (R-Wis.), who has already held hearing on subject. He noted that takeover would result in one company’s controlling at least 90% of DBS market: “That’s obviously monopolistic.” Rep. Green (D-Tex.) of House Commerce Committee - which also had hearing on deal -- said his colleagues “have the same concerns.” But Ken Johnson, spokesman for Commerce Committee Chmn. Tauzin (R-La.), said it would provide competition to cable in broadband, argument that’s being made by EchoStar Chmn. Charles Ergen. Tauzin is concerned about rural consumers who don’t have cable options being victimized by price gouging by combined DBS provider, Johnson said, but he said Ergen had promised Tauzin that company would charge same rate in rural areas as in competitive markets. Johnson said that for deal to meet regulatory approval it would most likely have conditions attached to it.

Senate Commerce Committee Chmn. Hollings (D-S.C.) has less confidence in Ergen, committee counsel Al Mottur said. He said Ergen was fighting must-carry and was offering local- into-local in at most 40 markets after he had promised he would enter at least 75. Now Ergen is saying he'll offer local in all TV markets, Mottur said, but he said Hollings believes “you should watch not what we say but what we do.” Senate Judiciary Committee ranking Republican Hatch (R-Utah) also has raised concerns about deal.

Now that 35% broadcast ownership cap has been remanded to FCC, Senate Communications Subcommittee ranking Republican Burns (R-Mont.) said Commission should “deal with it in an appropriate way.” That way, he said, should be to acknowledge “the diversity of outlets for information has never been as great as it is now.” House Commerce Internet Subcommittee Chmn. Stearns (R-Fla.) has legislation that would relax cap on dual ownership of TV stations and newspapers (praised by Tribune Bcstg., among others) and has proposed raising ownership cap to 45%. Several members took opportunity to criticize FCC for repeatedly having orders remanded on ground that they failed to justify their rules, although Mottur acknowledged that it was hard for FCC to outline its reasoning for ownership cap because it was prophylactic, aiming to prevent something before it happened.

Issue of possible congressional mandates arose both with free political time and DTV tuners. On free time, House Commerce Committee member Walden (R-Ore.) warned that campaign finance supporters viewed that issue as their next major push. Green said some local TV stations already gave free time and suggested more do so, especially for federal races: “It helps take the wind out of [free time backers'] sails.” However, Johnson called it “political road kill,” saying Tauzin “will never let it out of committee.” Some have faulted federal govt. for not mandating DTV tuner standard, suggesting that consumers would find themselves unable to receive all DTV signals as broadcasters chose different standards. There is precedent for such federal standard in All Channel Receiver Act that spurred availability of UHF signals. While most members and staff queried about it were wary of federal mandates -- Burns said “once the government sets standards, we are frozen in that technology for the next ten years” -- staffer for House Telecom Subcommittee Chmn. Upton (R-Mich.) said his boss was open to mandating full DTV tuner inclusion in sets 32” or larger. Rep. Issa (R-Cal.), former CEA chmn., said he had been discussing issue with CEA Pres. Gary Shapiro Mon. and recognized its importance. He didn’t accept issue as being related to slow rollout of DTV, however, saying that market had to be allowed to take its course: “Consumers have the right to say, ‘I don’t want [DTV] on your timetable, I want it on my timetable.'”

Several members and their staffs expressed disappointment that NBC had pulled its late-night liquor ad experiment, saying that use of PSAs, restrictions on images and targeting shows with adult audiences seemed appropriate approach. Johnson said Tauzin felt his proposal of hearings might have scared NBC off -- Tauzin was responding to call from Rep. Wolf (R-Va.) who opposed ads -- but Johnson said Tauzin intended to have witnesses address fact that, in Tauzin’s mind anyway, there was no distinction between liquor and beer or wine.