FCC Lifts Conditions on News Corp.'s Purchase of Major Stake in DirecTV

Commission says arbitration conditions now serve "no transaction-related purpose"

By John Eggerton -- Broadcasting & Cable, 6/15/2009 2:28:01 PM

The FCC has removed the last conditions on News Corp.'s purchase of a major stake in DirecTV from Hughes Corp.

Some public interest groups and competitors--including Dish and the American Cable Association--had opposed lifting the conditions on the company, but it seemed all but a foregone conclusion after News Corp. dealt off that 41% stake to Liberty in 2008, or what the FCC described as a "material change in circumstance."

At the time of its approval of the deal, the FCC lifted some of the conditions, including the program access condition, but not all.

The remaining conditions required News Corp. to participate in arbitration disputes over carriage of regional sports nets and participate in arbitration over retransmission consent negotiations with multichannel video providers.

"The Commission adopted the arbitration conditions to address the same underlying concern as the program access condition - to prevent a vertically integrated News Corp. from using its programming as a means by which to confer on itself and DIRECTV an anticompetitive advantage that would harm the public interest," the commission said. "Absent vertical integration between News Corp. and DIRECTV," the FCC said, "the arbitration conditions serve no transaction-related purpose."

The FCC refused to delay lifting the conditions until it decides its open inquiry on program access in general. News Corp. had countered that suggestion by saying it was unfair to continue to make it adhere to conditions that the FCC may or may not require as part of its larger review of program access.

The FCC did say anyone who had filed complaints before the order was released can still pursue them.