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Tag: Dish Network Corp

  • Dish, NAB & others urge FCC to deny Charter-Time Warner Cable merger

    Dish, NAB & others urge FCC to deny Charter-Time Warner Cable merger

    MUMBAI: The Charter Communications, Inc – Time Warner Cable, Inc merger is facing a lot of opposition from broadcasters. 

     

    The National Association of Broadcasters (NAB) has filed a petition with the Federal Communications Commission (FCC) that it should not approve the merger unless it is also willing to change broadcast ownership rules, which limits the number of radio and TV stations that a single entity can own.

     

    Joining the NAB is Dish Network Corp, which has filed a petition with the FCC to deny the proposed merger citing substantial harm to competition and consumers. Additionally, set top box maker Zoom Telephonics also asked the FCC to deny the said merger between the two over the issue of access to third-party modems.

     

    As broadcast ownership rules limit mergers, NAB said that broadcasters have far less negotiating power than big cable companies, which will only get bigger if the FCC allows the latest cable merger to proceed.

     

    According to the NAB, the greater imbalance will harm broadcasters in retransmission consent negotiations, in which cable operators pay broadcast stations for the right to air their channels.

     

    NAB said that if the pending merger was approved, then the top four multichannel video programming distributors (MVPDs) will control 79 per cent of the nationwide MVPD market, measured in terms of subscribers, and the top three alone, according to SNL Kagan, “will control two-thirds of the video delivery universe.” If consummated, the merger also would exacerbate concentration levels at the local and regional levels, with clear implications for consumers, as empirical research has shown that large, clustered cable companies charge higher prices than smaller, unclustered ones.

     

    The creation of yet another pay-TV behemoth would further competitively disadvantage local broadcast stations kept by outdated ownership rules from achieving a fraction of the vital economies of scale and scope that MVPDs enjoy and, as the FCC has recognized, can advance the public interest. The gross regulatory disparities between the pay-TV and the free-TV industries are illustrated in any number of ways, including the sheer size of MVPDs compared to TV broadcasters. The market capitalization of the combined AT&T/DIRECTV, for example, is more than 200 times larger than the market cap of several of the most sizable broadcast TV companies. New Charter – which the merging parties describe as “modest” in size – will have a market capitalization 72 times larger than some of the biggest broadcast TV station groups. Beyond this national scale, single pay-TV providers control access to significant percentages of viewers in many local markets. Even standing alone, Time Warner Cable (TWC), for instance, controls over 40 percent of the total MVPD market in 30 different Designated Market Areas (DMAs), and in eight DMAs, TWC’s share of the entire MVPD market exceeds 60 percent. Broadcast TV stations unable to combine under the FCC’s local TV ownership rule are at a notable disadvantage in negotiating retransmission consent agreements with such locally and nationally consolidated MVPDs.

     

    On the other hand, Dish Network Corp’s petition to deny the merger, outlines, among other things, the critical role that high-speed broadband plays in the video industry and the potential for the merger to significantly damage competitive development of over-the-top (OTT) video and limit consumer access to online video programming.

     

    Dish Network said that the merger presents risk of significant harms:

     

    New Parties, Same Harms: The proposed transaction would be no better for the public interest than the one proposed between Comcast and Time Warner Cable.

     

    A Suffocating Duopoly: The transaction will create a suffocating duopoly. Where a Comcast/Time Warner Cable merger would have created one behemoth, this transaction will result in two broadband providers (Comcast and New Charter) controlling about 90 per cent of the nation’s high-speed broadband homes between them.

     

    Threats to Online Video: The top two cable providers post-merger will not need to collude in order to bring their collective weight to bear on an online video distributor (OVD). Parallel foreclosures, with one of the two following the other, would be enough for an OVD to be shut off from most of the homes in the country.

     

    Concentration of Broadband Subscribers: The impact of New Charter would cause a significant proportion of the combined company’s high-speed broadband subscribers to lack access to alternative high-speed broadband options. Indeed, Charter admits that almost two-thirds of households in the New Charter footprint will not have access to at least one alternative high-speed broadband provider. For these customers, switching ISPs is not just an inconvenience, but an impossibility.

     

    Choke Points on the Charter/TWC Broadband Network: New Charter would have a panoply of foreclosure techniques at its disposal. It would be able to foreclose or degrade the online video offerings of competing MVPD and OTT video providers at any of three “choke points”: (1) the points of interconnection to the combined company’s broadband network, in effect the “on ramp” to the New Charter network; (2) the “public Internet” portion of the pipe to the consumer’s home; and (3) managed or specialised service channels, which can act as super HOV-lanes and squeeze the capacity of the “public Internet” portion of the New Charter broadband pipe. In addition, New Charter would have increased leverage that it could use to coerce third-party content owners and programmers to withhold online rights from online video platforms, thereby stifling a source of competition and innovation in the video industry.

     

    Sling TV CEO Roger Lynch states, “I believe that the proposed merger…. would cause significant and irreparable harm to emerging competitive online video products and services, as well as the performance of traditional satellite television service, ultimately reducing competition and choice for consumers. Accordingly, I believe that the merger as currently constructed is not in the public interest and should be denied.”

  • FCC: Dish Network resists Comcast-Time Warner Cable merger

    FCC: Dish Network resists Comcast-Time Warner Cable merger

    BENGALURU:  Citing irreparable harm to competition and consumers, and no discernible benefits, from the proposed union of the first and second largest cable companies in the nation, Dish Network Corp (Dish Network) filed its reply at the FCC to Comcast-Time Warner Cable’s (TWC) Opposition to the Petitions to Deny their proposed merger.

     

    “Everyone who likes to watch high-quality online video has particular reasons to worry about the proposed merger,” said Dish Network senior vice president and deputy general counsel Jeff Blum. “More than 54 per cent of the country’s high-speed broadband connections would be controlled by the combined company, and all online video distributors would be at the mercy of Comcast-TWC.”

     

    Some of the key points of Dish Network reply include:

     

    Comcast-TWC will be able to destroy OVDs with impunity. And destroy them it will: Dish’s experience based on the business case for Dish World and Dish’s soon-to-be-launched domestic OTT service demonstrates that an OTT could still turn a profit if it were to suffer foreclosure at the hands of a standalone Comcast, but not if the effects of the foreclosure spread across both of the Applicants’ systems. Based on his analysis of that business case, Dish’s expert economist Professor David Sappington concludes that, while foreclosure conduct on the part of Comcast today is probably survivable for an OVD such as Dish’s new OTT service, the same conduct would be lethal if undertaken by Comcast-TWC.

     

    As the petitions and comments demonstrate, high-speed cable broadband connections are the lifeblood of over-the-top (“OTT”) video services that typically target national audiences. For that reason, among others, the relevant geographic market for this transaction is national. Furthermore, the relevant product market should include only those services capable of supporting the robust online video services that consumers demand, which requires a household to have actual and consistent download speeds of at least 25 Megabits per second (“Mbps”). If approved, the combined Comcast-TWC would control more than 54 per cent of the broadband pipes in the United States that have speeds of at least 25 Mbps, and will be on a path to virtual dominance of the high-speed broadband market given that the combined company will pass nearly 70 per cent of pay-TV households in the US.

     

    Use of the Commission’s own method for estimating actual departures of a rival’s subscribers due to temporary foreclosure with a time horizon of six months leads to the conclusion that Comcast-TWC can reap eye-popping gains from denying its competitors NBCU programming. This will affect competition in a number of ways. It will cause subscribers to leave the competing distributor in favour of Comcast-TWC; it will cause dissatisfied Comcast-TWC subscribers to stay put instead of losing their access to NBCU; and it will let NBCU extract higher prices for its own programming by leveraging the fear of foreclosure.

     

    The merger’s claimed benefits, if any, cannot outweigh the merger’s harms. In the Opposition, the Applicants devote hundreds of pages to extolling the purported benefits of the merger. Many of these benefits are illusory or speculative—characteristically, the Applicants offer no more precise quantification than “hundreds of millions of dollars.” Many of the benefits are also not merger-specific. The upgrade of TWC systems, supposedly made possible thanks to the merger, is a prime example. Public documents show that TWC had planned to complete this transition itself as a standalone company. This means that large portions of the claimed benefits attributed to TWC upgrades (again left unquantified) should be disallowed in their entirety.

     

    Conduct conditions would fail to address the merger’s many harms. Conduct conditions did not work for Comcast-NBCU, and they would not work for this transaction, which poses substantially greater risks of harm. There is little reason to believe that Comcast will alter its pattern of repeatedly breaking promises. Moreover, the complexity of the gatekeeping function over the Internet choke points alone promises a myriad of technicalities that would likely allow circumvention of, and/or interpretive debate over, any conditions. Ultimately, if the Commission approves the merger believing that conditions are sufficient to address all the harms, there is no going back. The consequences of getting it wrong are too great, the risks too high. The public deserves better.

  • Dish to redeem $2.6 bn debt sold in May as Sprint Bid fails

    Dish to redeem $2.6 bn debt sold in May as Sprint Bid fails

    MUMBAI: Dish Network Corp (DISH), the satellite-TV company that abandoned its bid for Sprint Nextel Corp, will redeem $2.6 billion of bonds it issued last month to help fund the planned acquisition.

    The company will redeem on 24 June its $1.25 billion of five per cent bonds due May 2017 at 100 cents on the dollar and its $1.35 billion of 6.25 per cent notes due May 2023 at 101 cents on the dollar, plus accrued and unpaid interest, the Englewood, Colorado-based company said today in a regulatory filing.

    The company was required to redeem the securities if it failed in its bid for Sprint, based on terms of the bond sale completed on 15 May. Investors negotiated during the marketing period to increase the redemption price on the 10-year bonds to 101 cents from par during the first six months.

    The 2017 bonds were quoted as high as 100.5 cents on the dollar to yield 4.87 percent on May 28 before falling to 100 cents, yielding 5 percent, yesterday, according to prices compiled by Bloomberg.

    The 2023 securities were quoted as a low as 99.2 cents to yield 6.36 percent on June 6 before rising to a high of 100.8 cents, yielding 6.14 per cent, on June 19, Bloomberg prices show. They were quoted at 100.5 cents to yield 6.18 per cent yesterday.