Merged EchoStar and Hughes Will Deliver Local Broadcast Channels To All 210 U.S. Television Markets

27-Feb-02

EchoStar Communications Corporation (NASDAQ: DISH) and Hughes Electronics Corporation (NYSE: GMH) announced a new proposal that will enable the combined company to deliver local broadcast TV channels in all 210 Designated Market Areas (DMAs) in the United States. In their joint satellite application filed with the Federal Communications Commission (FCC), the companies detailed a technically and commercially feasible ""Local Channels, All Americans"" plan developed by DISH Networkô and DIRECTVÆ engineers that will allow the merged company to offer every consumer in the continental United States, Alaska, and Hawaii access to satellite-delivered local television signals. The filing also seeks authority to launch and operate a new spot-beam satellite that, when combined with four existing and under-construction EchoStar and DIRECTV spot-beam satellites and spectrum efficiencies achieved by combining frequencies from three of the companies' orbital locations, will enable the merged company to broadcast local TV channels in all 210 DMAs, including full compliance with federal must-carry requirements. Today, DIRECTV and EchoStar deliver local broadcast channels via satellite to consumers in a total of only 42 metropolitan markets. The merger eliminates carriage of duplicative content -- a total of more than 500 identical channels -- from the DIRECTV and DISH Network satellites which, when coupled with advanced spot-beam satellites and efficiencies created by the merger, would enable local channel delivery in all U.S. DMAs. EchoStar and Hughes filed the satellite application today contemporaneously with their filing of a formal response to comments on the merger previously filed with the FCC on February 4, 2002. ""While there are numerous consumer and competitive benefits from this pending merger, the ability to offer local channels to every consumer in every television market in the country -- including rural and underserved areas -- certainly is one of the most compelling aspects of this deal,"" said Charles Ergen, Chairman and CEO of EchoStar. ""Today, approximately 42 million TV households do not have the option to receive local channels via satellite, and as such, have no choice but to subscribe to cable. Without this merger, many of those will never see local channels on satellite and have no choice of local television providers."" Ergen continued, ""We have heard the concerns of local, state and federal representatives and officials and we appreciate their feedback and input. Only if this merger is approved by the federal government will millions of consumers in small and rural markets in every state finally have a true, competitive alternative to incumbent cable operators. Clearly, this merger is a win for consumers across all of America."" New set-top boxes and satellite dishes, which will be capable of receiving satellite signals from multiple orbital slots, will be made available free of charge to all existing DIRECTV and EchoStar customers who will require new equipment in order to receive their local channels from the combined company.  Consumers across the country will receive programming from the merged direct broadcast satellite service via one small satellite dish and will pay the same nationwide price for services. ""We are one nation, and there will be one dish and one rate card, regardless of a subscriber's location,"" said Ergen. ""This merger will bring to fruition so many tremendous benefits to consumers that it will set a new standard for the delivery of multichannel video and broadband services,"" said Jack Shaw, President and CEO of Hughes. ""In addition to delivering local channels in all 210 television markets, the combined company will bridge the 'digital divide' by offering affordable high speed satellite Internet access to consumers in every market, including the most rural areas of the country. We will create a more robust and efficient satellite platform with a larger subscriber base that will enable the merged company to transition existing niche satellite Internet services to a more affordable and accessible next-generation service."" The combined EchoStar-Hughes will also offer more high-definition channels, new interactive services, expanded national programming networks and additional educational, specialty and foreign language programming. The ability of the combined company to serve all 210 DMAs with local channels is contingent upon the proposed Hughes-EchoStar merger receiving the necessary government approvals from the FCC and U.S. Department of Justice, and the successful launch of three new spot-beam satellites. Implementation of the ""Local Channels, All Americans"" plan will begin immediately upon regulatory approval of the merger, and the rollout can be completed as soon as 24 months thereafter. The proposed transaction is also subject to review by the Internal Revenue Service, and requires approval by a majority of GM $1-2/3, GM Class H, and EchoStar shareholders. 

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