Business & Entertainment Editors
LITTLETON, Colo.--(BUSINESS WIRE)--Jan. 7, 2002--EchoStar
Communications Corporation (Nasdaq:DISH) issued the following
statement today in response to a petition filed by the National
Association of Broadcasters (NAB) on Friday, Jan. 4, 2002, asking the
FCC to modify or clarify the must carry rules:
With the recent addition of over 250 local channels to the DISH
Network Direct Broadcast Satellite television service, EchoStar is in
compliance with the Satellite Home Viewer Improvement Act's must carry
requirements. EchoStar originally planned to meet those requirements
through the construction and launch of two new satellites at a cost of
approximately $500 million. When Lockheed Martin and Space Systems
Loral failed to timely deliver those satellites, EchoStar implemented
the only alternative capable of meeting its must carry obligations
while assuring consumers in all markets uninterrupted access to a
complete lineup of local TV broadcast channels.
Over 100 must carry channels are now available to EchoStar
customers without any additional equipment. Consequently, customers
previously receiving only NBC, CBS, ABC, FOX, together with a national
PBS channel, now also receive for no additional charge their local WB,
UPN, PBS, and other must carry channels. Unfortunately, as a result of
the delayed launch of the new EchoStar 7 and EchoStar 8 satellites,
limited bandwidth renders it impossible from a practical perspective
for all must carry channels to be included on the same satellite.
Consequently, in order to avoid disruption of service or delays in the
introduction of must carry channels, EchoStar is offering a free
satellite antenna to any customer who would like to receive the
remaining must carry channels from a second EchoStar satellite.
By filing a petition for modification or clarification instead of
a complaint for failure to comply with the must carry rules, the NAB
in its most recent FCC filing effectively concedes that EchoStar has
met its must carry obligation. Nevertheless, the NAB now asks that the
rules be modified to impose additional obligations on EchoStar. The
must carry statute, and the FCC must carry rules, were the result of a
thoroughly considered process, including a long notice and comment
period and a re-evaluation of those rules after they were issued. The
NAB was an active and vocal participant in the entire process. In
fact, the FCC modified and clarified certain of its rules in specific
response to NAB demands. However, the FCC declined to modify its rules
in other respects and left intact the right of EchoStar to implement
its must carry compliance plan. EchoStar then relied upon those rules
in shaping its must carry compliance program. Those efforts provide
significant benefits to the NAB and its members in addition to the
benefits enjoyed by consumers. No additional obligation should be read
into the statute.
EchoStar has acted in good faith to shape its compliance program.
EchoStar went to the extraordinary step of discussing its
implementation plans in advance with not only the FCC, but also
members of Congress and the NAB. Unfortunately, the NAB's continuing
aggressive actions show that it cares more about scoring political
points than serving its own members or consumers. If the FCC were to
accede to the NAB's latest tactics to modify existing rules, limited
bandwidth would force EchoStar to entirely terminate local channels in
a number of markets it currently serves.
"It is ironic because our must carry compliance program should
please the NAB and its members," said Charlie Ergen, chairman and CEO
of EchoStar. "The NAB said it wants satellite TV providers to offer
local channels to consumers in a greater number of markets. They have
also said they don't want consumers to lose local channels in any
markets we currently serve. If the pending merger of EchoStar and
Hughes Electronics and its DIRECTV is approved, EchoStar will be able
to provide local channels by satellite in over 100 markets with full
must carry compliance. And we will be able to do it all from a single
dish as the NAB has also demanded. Yet, absurdly, the NAB is against a
merger that will provide the only way to achieve all of their
NAB members have the right to use the free digital TV spectrum
they receive from the government to compete in the pay TV market.
EchoStar welcomes that competition not withstanding the failure of
many NAB members to timely comply with the obligations on which
Congress conditioned the grant and continued use of that spectrum.
However, the NAB goes too far when it pursues its agenda at the
expense of American consumers.
EchoStar Communications Corporation and its DISH Network operates
a state-of-the-art direct broadcast satellite TV system that is
capable of offering over 500 channels of digital video and CD-quality
audio programming, as well as advanced satellite TV receiver hardware
and installation. EchoStar is included in the Nasdaq-100 Index (NDX).
DISH Network currently serves over 6.43 million customers. For more
information, visit www.dishnetwork.com.
In connection with the proposed transactions, General Motors
Corporation ("GM"), Hughes Electronics Corporation ("Hughes") and
EchoStar Communications Corporation ("EchoStar") intend to file
relevant materials with the Securities and Exchange Commission,
including one or more Registration Statement(s) on Form S-4 that
contain a prospectus and proxy/consent solicitation statement. Because
those documents will contain important information, holders of GM
$1-2/3 and GM Class H common stock are urged to read them, if and when
they become available. When filed with the SEC, they will be available
for free at the SEC's website, www.sec.gov, and GM stockholders will
receive information at an appropriate time on how to obtain
transaction-related documents for free from General Motors. Such
documents are not currently available.
General Motors and its directors and executive officers, Hughes
and certain of its officers, and EchoStar and certain of its executive
officers may be deemed to be participants in GM's solicitation of
proxies or consents from the holders of GM $1-2/3 common stock and GM
Class H common stock in connection with the proposed transactions.
Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by EchoStar
on November 1, 2001 and by each of GM and Hughes on November 16, 2001.
Investors may obtain additional information regarding the interests of
the participants by reading the prospectus and proxy/consent
solicitation statement if and when it becomes available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
Materials included in this document contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause our
actual results to be materially different from historical results or
from any future results expressed or implied by such forward-looking
statements. The factors that could cause actual results of GM, Hughes,
EchoStar, or a combined EchoStar and Hughes, to differ materially,
many of which are beyond the control of EchoStar, Hughes or GM
include, but are not limited to, the following: (1) the businesses of
EchoStar and Hughes may not be integrated successfully or such
integration may be more difficult, time-consuming or costly than
expected; (2) expected benefits and synergies from the combination may
not be realized within the expected time frame or at all; (3) revenues
following the transaction may be lower than expected; (4) operating
costs, customer loss and business disruption, including, without
limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected
following the transaction; (5) generating the incremental growth in
the subscriber base of the combined company may be more costly or
difficult than expected; (6) the regulatory approvals required for the
transaction may not be obtained on the terms expected or on the
anticipated schedule; (7) the effects of legislative and regulatory
changes; (8) an inability to obtain certain retransmission consents;
(9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or
otherwise, direct broadcast satellite, other satellite system
operators, and other providers of subscription television services;
(11) the introduction of new technologies and competitors into the
subscription television business; (12) changes in labor, programming,
equipment and capital costs; (13) future acquisitions, strategic
partnership and divestitures; (14) general business and economic
conditions; and (15) other risks described from time to time in
periodic reports filed by EchoStar, Hughes or GM with the Securities
and Exchange Commission. You are urged to consider statements that
include the words "may," "will," "would," "could," "should,"
"believes," "estimates," "projects," "potential," "expects," "plans,"
"anticipates," "intends," "continues," "forecast," "designed," "goal,"
or the negative of those words or other comparable words to be
uncertain and forward-looking. This cautionary statement applies to
all forward-looking statements included in this document.
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