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Martin Recommends Approval of Liberty Media-DirecTV Merger

FCC Chairman: Liberty’s Malone Must Restructure or Divest Interest in Puerto Rico Cable Systems 2/08/2008 04:57:00 AM Eastern

Federal Communications Commission chairman Kevin Martin said Friday that he was recommending approval of the Liberty Media-DirecTV merger, subject to some conditions.

Kevin Martin

In a press conference where he outlined agenda items for the commission’s Feb. 26 meeting, Martin said he favored the deal so long as Liberty chief John Malone either restructured or divested his interest in Puerto Rican cable systems.

He also said the FCC would maintain "most of" the conditions applied to DirecTV when News Corp. purchased the satellite service, though he did not say which ones.

Martin conceded that any and/or all of the items he outlined could either be pulled from the meeting agenda or voted on before the meeting. He said he wasn't sure whether he had the three votes to approve the deal, although for his part, Commissioner Robert McDowell said he supports the deal "in genera," but was studying it to ensure there were no "unnecessary conditions placed on the transaction," according to an aide.

Asked whether he had three votes for the Liberty-DirecTV approval, Martin said he wasn't sure whether he had three votes on any item he proposes. "We'll wind up having to see what the other commissioners want to do," he added.

Martin had said last month to look for a decision in the first quarter, although he also said he expected the Department of Justice to come out with its review of the deal first.

He added that he doesn't know what the DOJ has done. "We have coordinated it," he said, "but we have decided that we are going to go forward on this at this time."

If the transaction is approved Feb. 26, it will be a year and a day since the commission began considering the deal. The commission has an informal shot clock of 180 days on mergers, but it frequently misses that 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 were imposed on News Corp. by the FCC when it approved the company's purchase of more than one-third of the satellite broadcaster from Hughes Electronics in January 2004.

Those include not Liberty's agreement not to enter into exclusive programming arrangements with any multichannel-video provider, not to discriminate against unaffiliated program services and to submit any RSN carriage impasse to independent arbitration.

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