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The Department of Justice said Thursday that it has filed suit to block EchoStar Communications Corp.’s $16.9 billion acquisition of DirecTV, which is a unit of Hughes Electronics Corp. “This merger would give Echostar control of the skies for the provision of video programming by satellite, leaving customers to suffer from the resulting reduction in competition,” Assistant Attorney General Charles A. James said in a statement. “This merger would create a monopoly in those areas where cable television is not available, thereby eliminating the only competitive choice for millions of households. It would leave tens of millions of households — for whom DirecTV, DISH Network and cable now compete to provide multichannel video programming distribution service — with a reduction from three to two competitive choices.” The Justice Department said a recently proposed remedy by EchoStar, which would establish Cablevision Systems Corp. as a new competitor in the DBS market, would not replace competition lost from the merger. EchoStar agreed to buy DirecTV on Oct. 28, 2001, in a deal initially valued at $26 billion. The companies had argued the merger would benefit consumers by providing stronger competition against local cable monopolies, expediting deployment of broadband services and bringing local channels to every market. EchoStar spokesman Marc Lumpkin had no immediate comment on the lawsuit. �Copyright 2002, The Deal, LLC. All rights reserved.

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