US satellite operator EchoStar is offering to set up a powerful new rival in a last-ditch bid to gain regulatory approval for its mega-merger with satellite market leader Hughes Electronics.

As reported last week [WAMN: 29-Nov-02], EchoStar has filed a final set of revisions to the deal with the Federal Communications Commission, which blocked the merger in October.

At the time, details of the new concessions were not released. However, it emerged on Friday that EchoStar has vowed to set up a competitor “more powerful” than either its own network or Hughes’ would be on their own.

As under an earlier plan, EchoStar offered to hand cable operator Cablevision the basis of a satellite-TV network equipped with the latest technology. In addition, it has promised to help the newcomer with marketing and content, handing it the “right to resell” programs and other services offered by the merged entity. It would also offer subscribers who require new equipment the option of switching to Cablevision services.

However, although EchoStar claims the new concessions are “more than sufficient to resolve the competition concerns”, few observers expect the FCC to change its mind.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff