Justice Department to file lawsuit to block satellite TV mega-merger

WASHINGTON (AP) -- The Justice Department will file a lawsuit Thursday to block a merger between EchoStar Communications Corp. and Hughes Electronics Corp. that would have created the nation's largest pay-television service, according to a congressional office notified of the impending action.

The department's opposition comes despite concessions EchoStar offered last week to bolster a rival company and avoid concerns about a potential monopoly.

The lawsuit is expected to be filed Thursday afternoon, according to Todd Thorpe, a staffer in the office of Rep. Chris Cannon, R-Utah, an opponent of the deal who was notified of the action Thursday morning.

The Federal Communication Commission had already voted unanimously to oppose the $22.6 billion merger, saying it would create a monopoly that would have "staggering" adverse effects for consumers. The Justice Department's review was focusing on potential antitrust implications.

Officials from EchoStar met with Justice Department attorneys for several hours last Friday to discuss proposals to save the foundering deal and said they remained committed to seeing the deal through.

Echostar, based in Littleton, Colo., runs Dish Network, while El Segundo, Calif.-based Hughes operates DirecTV. Together they serve about 18 million subscribers and would be the largest pay-television service, although they would be overtaken if a merger of cable TV giants AT&T and Comcast is approved.

Echostar and Hughes argued the merger will allow them to compete with cable giants.

Opponents of the deal, including the FCC, said the merger would reduce the consumer's options for multi-channel television, and would create a monopoly in rural areas where cable television is not available to as many as 22 million homes.