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NEW YORK — AT&T said on Tuesday it will stop selling satellite television services from DirecTV Group in the first quarter in a sign the phone company may favor EchoStar as its sole satellite partner, Reuters reports.

Reuters further writes, “Still, AT&T Chief Financial Officer Rick Lindner told Reuters separately that the company has not made a final decision on the matter and could take until the second half of 2008 to decide.

AT&T has a marketing partnership with EchoStar in some markets and with DirecTV in others, and the phone company is also expanding its own video service called U-verse, which is delivered over high-speed fiber optic cables.

The company said it would stop offering DirecTV’s services to phone customers in the first quarter, while its current agreement with EchoStar extends until the end of 2008.” More at Reuters here and here.

WASHINGTON — The Federal Communications Commission (FCC) is moving toward resurrecting a proposal that would limit the size cable operators could reach on a nationwide basis, agency officials said Thursday, Nov 29, the AP and Reuters are reporting.

FCC Chairman Kevin Martin is circulating the proposal among his fellow commissioners for a possible vote at the agency’s next meeting, scheduled for Dec 18 and has enough support on the five-member commission to pass a measure that would bar cable companies from owning systems that have more than a 30-percent share of U.S. multichannel video subscribers, according to one FCC source.

Martin, fresh off a marathon meeting that featured a bruising battle with the cable industry, also wants commissioners to vote on a number of media ownership issues, including his proposal to allow one company to own both a newspaper and a radio or television station in the nation’s 20 largest markets.

Fearing the potential monopoly power of cable television companies, Congress in 1992 directed the FCC to establish limits on how many customers cable television companies could reach nationwide. The FCC settled on a 30 percent cap, but the U.S. Court of Appeals for the District of Columbia Circuit rejected the rule in 2001, saying the agency had failed to adequately justify its reasoning.

The issue has remained largely dormant since then as direct broadcast satellite providers — and more recently, traditional telephone companies — have continued to cut into the market share of the nation’s major cable television companies.

The immediate impact of such a cap would appear to be negligible. Comcast Corp., the nation’s largest cable company, reported 26.2 million subscribers to the FCC through Sept. 30, for a nationwide market share of all pay-television subscribers of 27 percent. More at AP, Reuters.

MOUNTAIN VIEW, Calif — November 30, 2007 — Google announced today that it will apply to participate in the Federal Communications Commission’s upcoming auction of wireless spectrum in the 700 megahertz (MHz) band.

As part of the nationally mandated transition to digital television, the 700 MHz spectrum auction — which begins January 24, 2008 — will free up spectrum airwaves for more efficient wireless Internet service for consumers.

Advocacy by public interest groups and Google earlier this year helped ensure that regardless of which bidders win a key portion of the spectrum up for auction (the so-called “C Block”), they will be required to allow their users to download any software application they want on their mobile device, and to use any mobile devices they would like on that wireless network.

The winner must ensure these rights for consumers if the reserve price of $4.6 billion for the C Block is met at auction.

“We believe it’s important to put our money where our principles are,” said Eric Schmidt, Chairman and CEO, Google. “Consumers deserve more competition and innovation than they have in today’s wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet.”

Schmidt also praised the leadership of FCC Chairman Kevin Martin and his fellow commissioners for adopting the new rights for consumers earlier this year.

Google’s formal application to participate in the 700 MHz auction will be filed with the FCC on Monday, December 3, 2007 — the required first step in the auction process. Google’s application does not include any partners.More at Google.

Bidding separately instead of assembling a coalition does not rule out Google later signing up partners if it wins the bidding, said a source familiar with the company’s strategy. But the FCC has “anti-collusion” rules that prevent deal-making between potential bidders during the auction period.

The auction is expected to take several weeks, or even months, of daily, back-and-forth bidding, with the identities of the bidders kept secret. Big spectrum bidders typically draw up elaborate strategies, often with input from game-theory experts.

FCC officials hope the company’s participation will mean a possible new player in the wireless business and boost the amount of money the government can bring in from the auction.

New York — Nov 21, ‘07 –Reuters is reporting on much speculated EchoStar, AT&T deal, “EchoStar Chief Executive Charlie Ergen holds the key to whether the satellite television provider may be sold to AT&T and he’s unlikely to be swayed easily by money, industry sources and analysts said.

Ergen is not likely to want to leave the business he created, nor is it likely he would want to join a telephone behemoth that would probably frown on a maverick executive known to have ditched quarterly analyst calls for family vacations, they said on Tuesday.

Ergen, 54, owns about 50 percent of EchoStar’s shares and controls about 80 percent of voting rights. “People like Charlie Ergen don’t really care about the money per se at this point, they just want to stay in the game,” said the source, who has dealt with Ergen in the past. “He’s an entrepreneur at heart. He very much likes coming to work and operating his own business everyday.”

Long-running speculation of a deal between EchoStar, the second-largest U.S. satellite television operator, and AT&T, the biggest phone company, was reignited this week by reports in financial news providers Barron’s.

The reports said AT&T was looking to make an offer between $64 and $68 per share for EchoStar, or about $30.2 billion in total. Ergen founded EchoStar in 1980 and it is now the third-largest U.S. pay-TV operator with 13.7 million subscribers.

A source familiar with AT&T, who spoke on condition of anonymity, said a bid for EchoStar was not imminent.

Wall Street analysts said the business rationale for a merger makes sense: the two companies already are partners, with AT&T selling EchoStar’s DISH satellite television service alongside phone and Internet services.

Both face competition from cable companies like Comcast, which are selling bundled phone, video and high-speed Internet services to consumers.” More at Reuters.

Nov 18, ‘07 — AT&T is reportedly trying to put together a bid for EchoStar Communications before year’s end, whetted by the satellite operator’s recent stock dip, Reuters said citing Barron’s financial newspaper.

Reuters further writes, ”In the past, AT&T has supposedly offered $65 a share and EchoStar has demanded $75 a share, Barron’s said. The report follows months of speculations that AT&T may buy EchoStar to expand its video business and compete with cable providers.

On Friday, Citigroup upgraded EchoStar from a “hold” to a “buy” rating, citing an attractive valuation and its belief that there’s a 65 percent chance that AT&T acquires the satellite company over the next 12 months.” More at Reuters, Barron’s.

By DIONNE SEARCEY and DANA CIMILLUCA of The WSJ — October 24, ‘07 — AT&T Inc. has been circling the satellite-television sector for several years, contemplating a bid for one of the two major players. Now, with consolidation in the telephone industry mostly done, AT&T appears to be getting ready to swoop in.

AT&T has been consulting lawyers in Washington about how long it would take to get government approval to purchase either EchoStar or DirecTV, people familiar with the matter said. If it does make a bid for one of the satellite providers, AT&T could unveil the offer before year’s end in hopes of getting federal antitrust officials to approve the combination before a new administration takes over, these people say.

A final decision on a bid hasn’t been made. AT&T hasn’t even decided which satellite-TV firm to go after, although a purchase of EchoStar, of Englewood, Colo., could be easier to undertake because it has a less-complicated ownership situation. There also isn’t any guarantee that either company would be available.

But what AT&T shareholders and other investors are likely to focus on is the potential cost of a deal — between $30 billion and $40 billion, depending on the target — and the San Antonio telecommunications giant’s ability to absorb another acquisition after last year’s purchase of BellSouth Corp.

Talk about AT&T’s interest in a satellite-TV firm has swirled for several years, as the company, like rival Verizon, has made a big push into offering television service to counter cable-TV operators’ push into phone service. AT&T announced that through the third quarter, it had signed up 126,000 subscribers for its “U-verse” TV service, which uses Internet-based technology. The company says it will offer U-verse to 18 million homes by the end of next year, a project estimated to cost $6.5 billion.

A satellite deal would give AT&T a way of fending off rival cable operators luring customers with low-priced bundles of phone, TV and high-speed Internet services. A purchase also would allow AT&T to negotiate less expensive content deals for its TV service. And it would save AT&T the cost of rolling out U-verse in certain parts of the company’s expansive territory where laying the fiber optics is expensive.

Still, the premium AT&T would have to pay to land a satellite concern may offset those cost savings. Of the two satellite firms, DirecTV, which has 16.3 million customers in the U.S., versus EchoStar’s 13.6 million, would be cheapest as measured by a multiple of its earnings. DirecTV, of El Segundo, Calif., has a market value of about $30 billion, roughly 21 times earnings for the past 12 months.

More at WSJ

ViP-TV Offers Distributors the Ability to Deliver up to 300 Programming Channels, Including 40 Channels of HD & Local Broadcast Networks. Says Echostar. ENGLEWOOD, Colo. – Oct. 23, 2007 – EchoStar Communications Corporation and its subsidiary, EchoStar FSS Corporation (EFSSC), today announced the launch of ViP-TV™ service, through which EFFSC has the ability to transport over 300 channels of secure broadcast quality popular television programming via satellite to Telco, private and rural cable operators, municipalities and master planned community video providers that have obtained rights for distribution of programming over their wire-line networks.

ViP-TV is EFSSC’s turn-key solution for wholesale multi-channel content transport and distribution, and offers customers affordable, scalable and aggregated MPEG-4 Internet protocol encapsulated radio and television programming channels from a high-powered Ku-band satellite.

ViP-TV’s suite of channels includes ViP-Premier™, which offers over 100 channels of the most popular television programming, ViP-HD™, which boasts 40 channels of industryleading high definition programming; ViP-Movies™, a menu of 40 of the most popular movie services; ViP-Latino™, offering 30 of the top-rated Spanish-language programming services; and the ViP-International™ programming package, providing over 30 programming channels in 10 different languages.

More at Echostar(in pdf) and ViP-TV

CNNMoney, Citigroup analyst Jason Bazinet,  TheStreet.com senior writer Scott Moritz and Bloomberg News are speculating on the rumor – ”AT&T is likely to buy EchoStar”. AT&T has hired Goldman Sachs to explore the acquisition of EchoStar, TheStreet.com has learned.Goldman was hired by AT&T about a month ago, says a source familiar with the companies. It was around that time that EchoStar said it was considering splitting its TV broadcasting operations from its wholesale satellite transmission business.

The deal would make sense for both companies with AT&T struggling with its TV service called U-verse and EchoStar facing competition from companies with deeper pockets such as DIRECTV. With AT&T as an owner, EchoStar could invest more heavily in projects such as new satellites for High-Definition TV channels.

AT&T said it had no comment. “We are not commenting,” an EchoStar representative said.