Roger Yu

USA TODAY

Investors scooped up shares of Dish Network and DirecTV Wednesday following a report by Bloomberg News that the two satellite TV operators are considering a merger to ward off competitive threats from the rapidly changing cable industry.

Dish Chairman Charlie Ergen recently approached El Segundo, Calif.-based DirecTV for a possible merger as a strategic response to Comcast's proposal to buy Time Warner Cable that was announced last month, the report said, citing "several people with knowledge of the matter."

Shares of Dish, based in Englewood, Colo., rose 6.3% to end Wednesday at $62.09. DirecTV shares were up 5.7% to $77.34.

Dish and DirecTV declined comment on the report Wednesday.

The satellite operators' presence in U.S. major markets is generally smaller than their local pay-TV competitors that use cable or fiber optic technology. But they offer viable alternatives to consumers who are dissatisfied with their locally dominant cable or Internet service and are instrumental in spreading TV-high speed Internet access to rural markets.

With no other credible satellite operator operating nationally, federal regulators will closely scrutinize any possible merger deal between Dish and DirecTV. And the possibility that their deal may not be approved has DirecTV CEO Mike White reluctant to strike an agreement, the Bloomberg report said.

The two companies tried to merge in 2001 and the Federal Communications Commission quashed the deal. That the two companies would try again to merge has been rumored for years in the industry.

Dish, which is eager to expand its market share for broadband Internet, sought to buy wireless carrier Sprint Nextel but was outbid by Japan's Softbank.

"I highly doubt that DirecTV is the only company that Ergen has spoken with," Walt Piecyk, an analyst with BTIG, told Bloomberg.

With streaming video options growing, cable operators have been losing TV subscriptions for years even as more customers order broadband Internet access. U.S. cable operators lost about 2 million customers in 2013, according to research firm SNL Kagan.

To spur innovation, save costs and expand in key markets, Comcast agreed to buy Time Warner Cable for $45 billion earlier this year. And analysts believe a broader industry consolidation is imminent.

The satellite operators' performance wasn't as grim in 2013, though they are hardly immune from the "cord-cutting" trend seen in the cable business. Dish and DirecTV gained about 170,000 customers last year, with nearly all of the gain contributed by DirecTV. But SNL's report noted that they were "forestalling an annual decline for perhaps another year."

The two companies had about 34.3 million satellite subscribers as of the year-end.