FCC, DOJ Approve News Corp./DirecTV Deal - Broadcasting & Cable

FCC, DOJ Approve News Corp./DirecTV Deal

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The Federal Communications Commission and the Department of Justice late Friday approved News Corp.’s $6.6 billion deal to gain control of DirecTV Inc.

The commission’s approval, which included several major conditions, was split 3-2 along party lines. The DOJ’s only additional condition requires News Corp. to appoint only U.S. citizens to the Hughes Electronics Corp./DirecTV audit committee.

Officials from News Corp. and DirecTV’s current parent, General Motors Corp., said the deal -- which will give News Corp. a controlling 34% stake in GM’s Hughes subsidiary -- would close "in the next several business days."

To ensure that News Corp. does not abuse its new position as both a leading carrier and producer of pay TV programming, the FCC imposed several conditions on the deal, including:

• By the end of 2004, DirecTV must offer local TV stations in the top 130 markets, 30 more than the company had previously anticipated.

• All of the company’s multichannel-programming networks must be offered to competing cable- and satellite-TV providers on a nonexclusive and nondiscriminatory basis.

• Satellite-industry rules requiring good-faith negotiations for broadcast-carriage rights will remain in effect for News Corp. as long as cable program-access rules are in effect, rather than expiring in 2005, as they do for the rest of the satellite industry.

FCC chairman Michael Powell said, "News Corp. has a history of taking significant risks and introducing new and innovative media services. Enhanced competition will increase pressure to improve service and lower prices for both cable- and satellite-television subscribers."

Democratic commissioners Michael Copps and Jonathan Adelstein opposed the deal, arguing that News Corp. will have unprecedented and harmful reach across nearly every major media sector -- TV distribution; broadcast networks; TV stations; cable networks; major film- and TV-production studios; print; video backhaul; and electronic programming guides.

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