Officials - Satellite TV merger could hurt Missouri residents

WASHINGTON, D.C. -- The proposed merger of DIRECTV and EchoStar's DISH Network could have serious consequences for thousands of Missouri residents, according to U.S. Rep. Sam Graves (R-Tarkio).

In a July 25 letter to U.S. Attorney General John Ashcroft and Federal Communications Commission Chairman Michael Powell, Graves said many rural consumers, particularly in his district in northwest Missouri, "have no access to cable television and rely on satellite transmission for their multi-channel video programming."

If the merger is approved in its current form, Graves said, "rural consumers would be at the mercy of an unregulated monopoly." Graves also said that the merger could delay the delivery of high-speed data services to rural areas because competition would be eliminated.

"While I have heard about possible consumer protections, nothing has been put to paper," Graves wrote.

"Without strictly enforced consumer safeguards, I feel that this merger ... may have unintended consequences for rural America."

Across the state, about 590,000 households use small, home-based satellite dishes to pull in TV programming and access the Internet. Almost 40 percent of Missouri's rural households have no access to cable, making satellite their only option for multi-channel TV. Most rural families and small businesses also have no cable or DSL connections for high-speed Internet service.

Together, DIRECTV and DISH would control more than 90 percent of the national satellite TV market and 100 percent of the market in most rural communities. According to Yale University economist Paul MacAvoy, the merged firm can be expected to raise prices by about $28 a month in the Central Midwest, including parts of Missouri, Illinois, Kansas, Oklahoma and Arkansas. Service quality would also suffer, because rural consumers would have no other competitor to turn to.

Before the merger can be finalized, the FCC and the Justice Department must decide whether it violates federal law. Decisions are expected this fall.

In the meantime, Missouri's leaders are playing an active role in the debate. State Attorney General Jay Nixon has been rallying opposition to the merger among state attorneys general nationwide. Several other members of the state's congressional delegation have sent letters to Ashcroft and Powell, including Sen. Christopher Bond and Reps. Jo Ann Emerson, Ike Skelton and Kenny Hulshof.

Emerson has been a leader against the merger in her role as chairman of the Congressional Rural Caucus.

In another sign of local opposition, the Missouri Farm Bureau broke with its national office, which has a financial relationship with EchoStar, to come out in opposition to the deal, spurring similar rebellions by the Farm Bureaus of Kansas, Iowa, Oklahoma, Minnesota and Nebraska.