Attorney General's News Release

November 20, 2001

Nixon opposes monopoly on satellite service in rural Missouri

Jefferson City, Mo. — Attorney General Jay Nixon today said much of rural Missouri would be under the control of a monopoly for satellite television and broadband internet service if a proposed merger between the two companies that control 100 percent of the direct broadcast satellite market nationwide takes place.

In a letter to U.S. Attorney General John Ashcroft, Nixon says his office will investigate the merger of Hughes Electronics, owner of DirecTV, and Echostar Communications, owner of Dish Network. Nixon urged the Justice Department to intervene as well.

In his letter, Nixon pointed out that roughly one third of Missouri houses — mostly in rural areas — do not have the opportunity to connect with a cable system. Those 846,386 houses rely solely on direct broadcast satellite (DBS) service for multichannel television programming. If the merger is allowed to go through, Hughes and Echostar will control 100 percent of the DBS market in the state of Missouri. Such control would allow the new company to raise prices at will, cut service and neglect innovative products for customers.

Nixon says the merger also hurts rural Missouri's ability to access broad band internet service, an important and growing technology.

"Allowing this acquisition would leave rural Missouri without this important service and create a market with little competitive incentive to provide the service," Nixon said. "Thus rural Missouri will fall even further behind urban areas in the competition for economic development. Businesses are less likely to locate in areas where they do not have full access to the same tools as their urban competitors."

Missouri's antitrust law, contained in Chapter 416, prohibits attempts to monopolize and gives the Attorney General the authority to investigate such attempts and to bring an injunction to stop mergers that would create a monopoly.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818