An FCC ruling issued Wednesday may have put DirecTV Group Inc. and Echostar Communications in play, according to a post on Blogging Stocks.
The clearly partisan 3-2 ruling could make it easier for the Baby Bells to enter the pay TV business because it will require local cable franchising authorities to decide on applications for access to local rights of way within 90 days, and to act within six months on applications from new competitors. Of course, the cablers, who are eager to keep their local monopolies, are likely to sue in hopes of at least stalling implementation of the new rules, according to Blogging Stocks.
Consequently, the Bells — namely AT&T Inc. and Verizon Communications Inc. — could circumvent the whole process by buying either direct broadcast satellite provider in turn, giving them all the franchise rights in one shot, suggests Blogging Stocks. The Bells then could transfer DBS subscribers in their home regions to IP TV via fiber-optic networks rather than relying upon the satellites. The notion is an intriguing one, but there are some obstacles to acquiring the DBS providers.
In the case of DirecTV, odds are good John Malone will refuse to cede his recently acquired interest in the company. He's fought long and hard to get back into the distribution business, so any buyer will need either to offer concessions such as carrying Liberty Media content, or pay a high premium. Additionally, Malone made life miserable for the old AT&T, which bought his cable company TCI, so even the new management would be weary of letting him back in the door.
Consequently, the Malone issue makes the industry's runner up Echostar the more likely target. So if Blogging Stocks is correct, expect the two Bells to battle for Charles Ergen's birds. —Matthew Wurtzel
See post from Blogging Stocks
See story about FCC ruling from The New York Times
See related story about Malone from The Deal
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