CAGW Supports EchoStar/DirecTV Merger

(Washington, D.C.) - In letters to Capitol Hill, the Department of Justice, and the Federal Communications Commission, Citizens Against Government Waste (CAGW) called for prompt approval of the proposed EchoStar/Direct TV merger without interference, and an end to the ineffective, costly technology programs that would become redundant as a result of the merger.  The proposed merger will help make high-speed Internet available to every household in America without spending taxpayer funds.

Federal funding for programs aimed at closing the so-called "digital divide" reached an all-time high in fiscal 2001.  In fiscal 2002, the government continues to spend hundreds of millions of dollars on such programs.  For example, Congress appropriated $700 million for the Education Technology Block Grant program, $32.5 million for Department of Education's Community Technology Centers Program, and $15 million for the Department of Commerce's Technology Opportunities Program. 

"The government's current efforts are ineffective and costly.  This merger would help eliminate government interference in this emerging marketplace," CAGW President Tom Schatz wrote in the letter to Attorney General John Ashcroft and FCC Chairman Michael Powell.  "Consumers in the cattle country of Montana or the under-served neighborhoods of our big cities would have immediate access to broadband.  It would be provided at the same affordable uniform price available to suburbanites."

The merger will also provide the benefits of a new level of competition in both pay-TV and broadband services.  Currently, cable TV companies hold 80 percent of the pay-TV market, while the regional Bell companies control 86 percent of the DSL broadband market.  EchoStar and DirecTV would add to their local programming and be able to compete more effectively in both markets.

"This is clearly a merger that would actively serve the public interest," continued Schatz.  "CAGW urges Congress to let the free enterprise system work and not to interfere with this merger, and hopes that the Department of Justice and Federal Communications Commission approve the deal as quickly as possible and without extensive conditions."

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.