Justice staff opposes merger

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Tuesday, Sept. 24, 2002 | 9:44 a.m.

WASHINGTON -- EchoStar Communications Corp.'s plan to buy Hughes Electronics Corp. has failed to win the recommendation of Justice Department staff members, who say it should be blocked on antitrust grounds, the New York Times reported today, citing lawyers familiar with the review.

The Justice Department staff opposes the deal because in many markets it would cut competition from three companies to two and in rural areas remove choice altogether, the Times said, citing the unidentified attorneys. DirecTV and EchoStar's Dish Network, the second-largest U.S. satellite TV service, together would control 90 percent of the U.S. satellite TV market.

"Frankly, I'm not surprised," said Mark Ostrau, an antitrust lawyer at Fenwick & West in Palo Alto, California, about the Justice recommendation. "It comes down to the fact that there are only two providers and this would make it one."