Industry backs EchoStar's DirecTV deal

NEW YORK - EchoStar's takeover of its larger US satellite TV rival, DirecTV, has been given a boost with the news that the chief executives of two of the world's biggest media companies are backing the deal.

AOL Time Warner's Gerald Levin and Vivendi Universal's Jean-Marie Messier have agreed that competition in the US pay-TV market would not diminish if EchoStar took over DirecTV.



They are said to be backing EchoStar CEO and chairman Charles Ergen's argument that the combination would strengthen competition between satellite and cable.



Levin's comments have come as a surprise to the industry because the combined EchoStar-DirecTV will have 16.7m satellite TV subscribers -- bigger than the largest cable operator, owned by AT&T, which has 15m subscribers. AOL Time Warner's cable division has just more than 12.7m subscribers.



EchoStar is facing increased opposition from Washington with a number of congressmen believing the deal is anti-competitive.



However, it is uncertain whether media companies will join in the fight to stop EchoStar acquiring DirecTV because they do not want to invite further regulatory attention.



Levin and Messier are said to agree that the media business is already too heavily regulated. Levin said, "There is distrust of our companies by the regulators. Music, movies and cable -- these are lightning rods."



Disney, which opposed the AOL Time Warner merger, said it is examining the deal and its implications. News Corp, which withdrew its offer for DirecTV, is understood to be considering mounting a challenge aimed at blocking the deal.



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