Charlie's angel: Gene Kimmelman grew up on the other side of everything from EchoStar's Charlie Ergen. Yet he has become the satcaster's No. 1 ally on Capitol Hill

Cable World, April 1, 2002 by Alicia Mundy

Back in the '70s, they were two teenagers at Oak Ridge High School, in the hills of-Tennessee, running in mutually exclusive circles. Charlie Ergen was Mr. Popularity, the chick magnet, a basketball star in a basketball-crazy town. Eugene Kimmelman was the A student, most likely to lead a sit-in on Earth Day, singing "Blowin' in the Wind." They were two years and a cultural chasm apart. Gene, destined for law school, spent hours worrying about the relationship between Big Business and the Little Guy. Charlie, prescient beyond his age, focused on the relationship between Big Business and Bigger Business.

Kimmelman became a crusader and, as a staffer on Capitol Hill, went on to make trouble for errant corporations. Ergen went on to make billions. Kimmelman, head of Consumers Union, the public interest lobby group, earned a reputation fighting against megalithic mergers and monopolies. Ergen absorbed allies and competitors and last fall, as the CEO of EchoStar Communications, proposed one of the most radical telecommunications mergers in American history.

But right now Ergen's proposed $26 billion purchase of DirecTV, a subsidiary of General Motors' Hughes Electronics Corp., is in trouble in Washington, D.C.--for several reasons: His deal entails nothing less than a rereading of America's most important antitrust law, the Clayton Anti-Trust Act; it puts the Federal Communications Commission and the Department of Justice in rather awkward situations; it's making some Republicans spout pro-regulation rhetoric; it has mobilized the National Association of Broadcasters for the fight of its life; and it's certainly got the cable industry's smaller members in a frenzy. However, the National Cable Telecommunications Association is loudly not opposing the merger. By the time you finish reading this, you may understand why the NCTA probably doesn't have to.

To deal with his myriad enemies, Ergen (and Hughes and GM) have hired some 50 lobbyists. But, in one of those special Washington ironies, the only person standing between Ergen and disaster at this moment is the guy he barely noticed back in the corridors of Oak Ridge High--Gene Kimmelman. The director of the Consumers Union is warily supporting the merger as the chief foil to what Congress and federal regulators perceive as a monopolistic cable industry. Kimmelman must win on the Hill and with regulators if he is to save Ergen from his opponents and his competitors. But the biggest problem facing Kimmelman, say Washington insiders, is how to save Charlie Ergen from himself.

Washington is an alien place to most corporate moguls. What makes CEOs succeed is an alchemist's blend of arrogance, bluster and the Gordian knot approach to solving problems. But that same behavior can mean death in D.C. Politicos whisper giddily about the likes of Disney's Michael Eisner, ABC's Bob Iger and News Corp.'s Rupert Murdoch getting lessons in Hill talk and learning the steps of the intricate minuets to be danced in order to get their deals approved.

Judianne Atencio, the chief spokesperson for EchoStar, told Cable World that Ergen would not be available to be interviewed for this story. But Charlie Ergen's interactions with official Washington are already legend. Industry and government sources wince at his recent appearances. Ergen's public statements have hamstrung his unlikely entourage of coaches and supporters, among them Kimmelman and Andy Schwartzman, the garrulous head of the Media Access Project, which represents the Consumers Union and other groups in court fights. Several weeks ago they were prepping Eddy Hartenstein, CEO of DirecTV, and Ergen, for their visits to Washington. Think Training Day, but in reverse. The object was to turn these two streetwise dudes into courtiers. Hartenstein came polished and ready to genuflect when signaled. Ergen, however, posed a slightly different problem.

Ergen, 48, is literally a pioneer in his industry, and he lives in an area of the country--Colorado--known for its direct approach. Ergen indicated to some of his cohorts that he didn't like going to Washington to beg for approval of a merger that to him made perfect sense. It's possible he failed to completely hide his disdain for the process.

But style alone isn't Ergen's main hurdle. It's the substance of what he says and does that drives his supporters nuts and outrages politicians. Surprisingly, many congresspeople are amenable to finding some way to allow the creation of the obvious monopoly of EchoStar-DirecTV. This is because they're sick of hearing complaints from constituents about their cable rates and their cable service. If putting up a DBS company to compete with cable provides politicians with relief from cable "noise," as one senator who asked for anonymity says, it might be worth it. But video entertainment distribution seems less important to Congress than the notion that the combined EchoStar-DirecTV may be able to provide high-speed Internet access to rural areas. As a result, Ergen's proposal has more allies than would be expected for a deal that seems to have "antitrust violation" stamped all over it. They tentatively include the very liberal Sen. Patrick Leahy (D-Vt.), who heads the crucial Senate Judiciary Committee; Rep. Billy Tauzin (R-La.), chairman of the House Commerce Committee; Sen. John McCain (R-Ariz.); and Rick Boucher (R-Va.). But Ergen can't stop contradicting himself, which is why some politicians say they would be more supportive of the deal if it were ABC--Anybody But Charlie.