Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
(202) 387-8030;

April 5, 1996

The Honorable Reed Hundt
Federal Communications Commission
1919 M Street, N.W., Room 814
Washington, D.C. 20554

Re: File No. 55­SAT­AL­96 -- Application Of Direct Broadcasting Satellite Corporation, A Delaware Corporation, For Assignment Of Authorization To Direct Broadcasting Satellite Corporation, A Colorado Corporation

Dear Chairman Hundt:

This letter concerns a matter before the Commission regarding the allocation of Direct Broadcast Satellite ("DBS") frequencies. In the above captioned application for assignment, Direct Broadcast Satellite Corporation-Delaware ("DBSC-DE") seeks authorization to assign its DBS frequencies, 22 partial CONUS frequencies evenly split between the 61.5 W.L. and 175 W.L. orbital positions, to Direct Broadcast Satellite Corporation-Colorado ("DBSC-CO"). This assignment would result in a single entity-EchoStar Communications Corporation ("EchoStar"), the sole owner of its subsidiary DBSC-CO as well as Directsat Corporation-controlling 90 out of 256 DBS frequencies.

We are concerned with all forms of media concentration that result in anti-competitive effects and diminish the diversity of available programming by limiting the number of providers. DBS promises to be the video programming provider of the future. Allowing a single company to control 90 frequencies, or over 35% of the finite DBS resources, unnecessarily limits the number and strength of possible DBS competitors due to EchoStar's dominant position, and stifles the possibility of true competition within the DBS sector as well as between DBS and traditional video providers.

EchoStar, through DBSC-CO, claims in its assignment request that receipt of these additional frequencies will "serve the public interest" and "further enhance [EchoStar's] competitive resources." EchoStar advanced similar arguments in its acquisition of Directsat Corporation in 1994 and these rationales are no longer accurate. EchoStar already controls 23% of all full-CONUS frequencies (allowing it to provide 132 channels of actual programming to the full continental U.S.-surely a sufficient number to compete in the DBS market) and the assignment would aggregate 43% of all partial-CONUS frequencies under EchoStar's control. This concentration of a publicly owned resource in the hands of a single corporation cannot be justified and will predetermine that there are an extremely limited number of DBS competitors-reducing both the diversity of available programming and the possibility that a truly competitive market will develop.

In addition, EchoStar is apparently considering mergers with other significant holders of DBS licenses. Such a possibility is consistent with the current trend of corporate combinations. In addition to further reducing the likelihood of a competitive DBS market, the potential viability of DBS as an option to traditional cable may be jeopardized. For example, a possible alliance has been reported between EchoStar, MCI/News Corp., TCI (with its interest in Tempo and Primestar as well as one of the largest cable operations in the U.S.), and Microsoft. As the report stated: "No denials, no confirmations, just smiles from all involved." Such a merger would result in control of over 50% of the full-CONUS frequencies alone. The requested assignment is certainly not the last merger that will arise, and the Commission should take this opportunity to indicate unequivocally that competition in the DBS arena will be preserved

The Commission must draw a distinction between those actions that will allow a licensee to compete and those that so supplement a corporation's resources as to ensure not only that it can compete, but that it will be able to compete so well as to have an anti-competitive effect on the DBS market. By controlling these vast quantities of exceedingly valuable DBS frequencies, barriers to market entry will continue to rise. A vibrant and competitive DBS market will do far more for accomplishing the Commission's highest public interest goals, including numerous outlets encouraging programming diversity and affordable service ensured by many competitors. Permitting the requested assignment will be a step towards precisely the opposite result with absolutely no countervailing benefit.

Submitted: March 5, 1996,

/s/Todd J. Paglia
Consumer Project on Technology
PO Box 19367
Washington, DC 20036

/s/Jeff Chester
Center for Media Education
1511 K Street, NW, Suite
Washington, DC 20005

/s/Brad Stillman
Consumer Federation of America
1424 16th Street, NW, Suite 604
Washington, DC 20036

The Honorable James H. Quello
The Honorable Rachelle B. Chong
The Honorable Susan Ness