FCC OKs Liberty Media-DirecTV Deal

Program-Access, Carriage, Regional-Sports Conditions Remain

By John Eggerton -- Broadcasting & Cable, 2/25/2008 6:55:00 PM

The Federal Communications Commission Monday approved the transfer of control of satellite service DirecTV from News Corp. to Liberty Media.

As advertised, the deal does not come without conditions. Liberty and DirecTV must hold to program-access, carriage and regional-sports conditions similar to those imposed on News Corp. when it bought DirecTV in 2003, with the conditions in effect for six years.

Also as expected, it requires Liberty chief John Malone to divest Puerto Rican cable interests.

The deal was approved by the three Republican commissioners, with Democrats Michael Copps concurring and Jonathan Adelstein approving in part and dissenting in part.

While Copps opposed News Corp.'s purchase of the satellite service, he noted that this was "the transfer of assets from one giant media conglomerate to a marginally less-giant media conglomerate," so he did not oppose the deal.

Both Copps and Adelstein applauded the conditions, but where the latter dissented was accepting DirecTV's solution for delivering all local TV stations in all local markets by the end of the year, which is a hybrid satellite/over-the-air solution that Martin has said sufficed but that Adelstein called "an unfair service tax on rural households."

The DirecTV deal took a rather circuitous path since it was proposed a little over one year ago. The commission has an informal shot clock of 180 days on mergers, but it frequently misses its own mark.

When the deal was announced Jan. 31, 2007, Liberty said it would agree to abide by the conditions -- including program access and carriage conditions for the regional sports networks -- that the FCC imposed on News Corp. when it approved the company's purchase of more than one-third of the satellite broadcaster from Hughes Electronics in January 2004.

FCC chairman Kevin Martin initially planned to vote on the deal at the commission's February meeting but cleared the docket for a broadband-network-management road trip to Harvard. The deal was instead voted "on circulation" by the commissioners.

Martin's telegraphed support of the merger came as part of an unusual meeting two weeks ago in which he outlined the FCC's agenda -- a first in terms of the press and the public -- although the agenda was overtaken by the Harvard forum on network management.

Broadcasters were not happy with the hybrid arrangement.  “We continue to believe that rural America and those who live in smaller markets deserve the same access to high quality broadcast programming as those living in the largest markets," said NAB spokesman Dennis Wharton in a statement, "and we would hope the FCC re-visits this issue," preferably by ensuring satellite carriage for all TV stations--broadcasters already have must-carry rights on cable.

“Meanwhile, we look forward to working with Rep. Bart Stupak (D-MI) and other members of Congress to ensure that all satellite TV customers have the opportunity to receive news, entertainment and lifeline services provided by local television stations.”