The satellite TV services have tried to merge before, but the FCC rejected the deal in 2002 on grounds that it would be anti-competitive.
However, since then, there has been an explosion of new video services from telcos Verizon and AT&T to VOD-based set-tops from Amazon, TiVo, Apple and Microsoft, among others. DIRECTV and Dish Network have far more competition now than ever before.
Additionally, critics of the XM-Sirius deal made a similar argument that it would hurt consumers and be anti-competitive. However, reports today say that the FCC will soon approve it after the companies agree to several concessions such as price limits.
"It's a logical segue," Jimmy Schaeffler, chairman of the Carmel Group, and a longtime satellite industry watcher, told The Hollywood Reporter yesterday when asked if DIRECTV and Dish Network will now merge. "They will clearly have a better chance."
The Hollywood Reporter says the two companies are not commenting, but another analyst says the merger would still face major regulatory obstacles.
"I wouldn't be surprised to see speculation about a Dish-DIRECTV merger based on the satellite radio approval, but the fundamental legal argument in both mergers are quite different," Sanford C. Bernstein analyst Craig Moffett told the publication.
Moffett said the FCC's decision in 2002 said a satellite TV merger would create a monopoly in rural America.
"Since then, the telcos have deployed a significant amount of fiber and begun deploying video networks, but none of that activity has been in rural America," Moffett said. "So, the legal test in rural America hasn't changed one iota. I don't think a merger of that kind is likely."
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