Ergen Implies DOJ Should Challenge Disney/Fox as Vigorously as AT&T/TW

Ergen has “been around long enough to know that each transaction is different and that the government will handle them differently,” he said in Q&A. “But to the extent that there are similarities” between Disney/Fox and AT&T/TW, “I would argue that there are, and those should be treated consistently,” he said. “In my experience with the Justice Department in particular, that’s typically the case.” Disney and Fox representatives didn’t comment.

“Consumers would like to pick and choose what they watch, and obviously the nature of the beast today is not quite that way for anybody,” said Ergen. Dish isn't “a big enough company to make the rules in Washington, and we’re subject to the courts like everybody else,” he said. “We’ve been around long enough to know we’re going to have to be able to be adaptive to that and make sure we plan for these kinds of contingencies.”

Ergen thinks DOJ today would let Dish combine with DirecTV, were AT&T hypothetically to offer to divest itself of DirecTV as a condition to win regulatory approval of AT&T/TW, he said. When Dish’s then-EchoStar parent tried to buy DirecTV in 2001 but was met with strong regulatory opposition (see 0209050039 or 0209060011), the DBS market was very concentrated among a few players and was growing, he said. Now, “you’re close to double digits” in the number of MVPDs, and DBS is declining, he said. “Justice would look at that positively. That’s my opinion, and I have no inside information.”

As a “general statement,” Ergen thinks “much of the 5G talk is confusing, misinformed, inaccurate and spinworthy.” Though 5G’s initial focus has been on “higher-end spectrum,” Ergen thinks “you’re going to see 5G impact all levels of spectrum, starting at 600 MHz.” Dish has identified about 500 MHz of terrestrial spectrum “that could be put into use pretty much right away,” he said: “We own a portion of it, but there are others who own it as well.” He’s “hopeful” FCC Chairman Ajit Pai can start a rulemaking, and “bring that into use,” he said. “That can come into use before just about any other form of spectrum.”

The “data demands of where we’re going as a country and a population continue to increase,” said Ergen. “The technology gets better, the efficiency gets better. We need all of those resources to meet up with the demand. We haven’t seen effective artificial intelligence or virtual reality and changes to our health care in the United States. We haven’t seen those things come online yet.”

The “analogy” Ergen likes to use to describe migration to 5G and “beyond,” is that “the world today is prop planes, and we just invested the jet engine and we can just start an airline with just jet engines,” he said. “It doesn’t mean the other guys won’t have jet engines, but they don’t want to write off all the prop planes. It’s going to take them a number of years to wean those prop planes out of their fleet.”

Dish had 13.2 million total pay-TV subscribers Dec. 31, of which 11 million were Dish satellite customers and 2.2 million were Sling TV subscribers, said the company in a 10-K SEC report Wednesday. It was the first time the company broke out separate disclosures for Dish and Sling TV customers and net subscriber additions. The satellite service was down 9.4 percent from the 12.17 million subscribers it had a year earlier, while Sling TV was up 47.4 percent. The satellite service lost a yearly average of 607,000 subscribers in 2013-2017, while Sling TV gained an average of 440,000 in that period.

Satellite TV “is very much a maturing business,” said Erik Carlson, to whom Ergen relinquished the CEO post in December so he could spend time day-to-day on Dish’s wireless business (see 1712050016). Satellite TV lacks the growth “dynamics that we had in early years, but we still see some opportunity,” said Carlson.