FCC Has More Questions on DirecTV Deal
By John Eggerton -- Broadcasting & Cable, 10/19/2003 8:00:00 PM
The FCC is looking for a few more answers from News Corp. and Hughes/DirecTV. Last week, the commission asked for additional information on News Corp.'s proposed purchase of just over a third of Hughes Corp., parent of DirecTV.
In a letter to both companies, the commission gave them until Oct. 29 to supply the new information.
From Hughes, the commission wants: subscriber figures, and subscriber gains and losses for the year 2000; whether customers get their service through DirecTV or the National Rural Telecommunications Cooperative; and details of discounts offered in collaboration with Disney. (Separately, DirecTV said last week it now has 11.7 million subs, an increase of 326,000 in the third quarter. See page 28.)
From News Corp., the FCC wants copies of affiliation agreements with a number of its TV stations, from KTVU(TV) San Francisco (Nielsen DMA 5) to KFQX-TV Grand Junction-Montrose, Colo. (DMA 190). The FCC wasn't saying what its investigators were looking for.
DirecTV plans to provide all the information the FCC has requested "as quickly as possible," said spokesman Bob Marsocci. News Corp. was just as obliging.
The FCC recently stopped its self-imposed 180-day merger review clock on the deal at 149 days while it prepared its request. It will restart it after receiving "adequate" responses.
Among the criticisms of the $6.6 billion deal is that News Corp. could withhold its "must-have" programming from cable competitors or overcharge for it.
Jeff Chester, of the Center for Digital Democracy, said he was "disappointed by the narrowness" of the FCC requests and complained that the FCC "failed to ask the fundamental question: With such significant broadcast and cable holdings, why would News Corp/Fox [once it controls DirecTV] compete against itself?"
The FCC has already asked a lot of questions, though. Its initial information request in July was a 10-page list.
If the FCC approves, News Corp. gains de facto control over Hughes/DirecTV. According to the plan submitted to the FCC, News Corp. Chairman Rupert Murdoch becomes chairman of Hughes, and former News Corp. Co-COO Chase Carey becomes Hughes president and CEO.
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