Hartenstein Beefs Up DirecTV Local Pledge


Adding meat to their promises, DirecTV Inc. and News Corp. said Tuesday that
they will carry local broadcasters' channels in all 210 U.S. markets if
regulators allow them to link up.

In a speech to his retailers, DirecTV CEO Eddie Hartenstein said News Corp.
has agreed to spend approximately $1 billion on a new generation of satellites
that will allow the direct-broadcast satellite provider to greatly expand its
local-broadcast and HDTV-programming offerings.

The pledge was one of several new commitments spelled out by DirecTV in a
Sept. 22 filing with the Federal Communications Commission, which is reviewing
News Corp.'s $6.6 billion bid to gain control of the satellite-TV distributor
from General Motors Corp.

Previously, News Corp. chairman Rupert Murdoch would only promise to offer
local signals in all markets when "economically and technologically

Also, by the end of 2004, DirecTV will either add local channels in 30 more
markets than it is currently committed to, add 30 more national high-definition
channels to its lineup, or provide some combination of those two options.

Thanks to a new arrangement between News Corp. and Thomson Consumer
Electronics, DirecTV will be able to offer by the end of next year a new
generation of set-top boxes with a suite of interactive news, sports, weather,
traffic and games.

By late 2005, DirecTV will have available yet another generation of set-top
boxes with integrated digital-video recorders.

Critics of the News Corp./DirecTV union were reviewing Hartenstein's pledges

He did not address, however, their biggest worry: that control of a
multichannel platform would give News Corp. leverage to demand unfair prices
from cable companies and DBS rival EchoStar Communications Corp. for its Fox

The worry is that Fox would have the power to deny local cable operators both
Fox cable and broadcast channels by moving all of the extensive News Corp.
programming stable to DirecTV unless they pay drastically higher prices.

Some cable operators have demanded that a News Corp. pledge not to charge
discriminatory prices for cable carriage of its in-house programming be set as a
condition for merger approval.

The National Association of Broadcasters wants a similar nondiscrimination
provision for broadcast channels. The NAB also wants to prohibit News Corp. from
transmitting its Fox network feed over DirecTV in any market already served by a
Fox affiliate.

The trade group had previously demanded that DirecTV begin carrying
local-broadcast channels in all 210 markets by Jan. 1, 2006.