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MCI FOES FIX ON FCC

Rivals, public orgs seek to block DBS service

WASHINGTON — Competitors and public interest groups asked the FCC on Monday to reverse a decision by agency staffers to grant MCI a license to operate a DBS service in the United States.

Opponents of the MCI license say the FCC should reevaluate the DBS application in light of the long distance company’s announcement in November that it plans to merge with British Telecom. In reaching their tentative decision in December, staffers said foreign ownership restrictions do not apply to subscription services such as DBS.

News Corp. is depending on the MCI license to launch its planned ASkyB DBS service in the U.S. Although the project was originally conceived as a 50/50 joint venture between MCI and News Corp., MCI CEO Bert Roberts has said publicly his company wants to reduce its stake in the license. MCI bid $682.5 million for the license at a government auction in January 1996.

Rivals object

Among those urging the FCC to reverse the staff decision was Primestar Partners, a consortium of cable companies which operates a medium-powered DBS service and wants to get into the high-powered DBS business. In its comments, Primestar argued that the FCC staffers erred when they determined that subscription DBS services are not subject to the same foreign ownership restrictions faced by broadcast television. Under current FCC rules, foreign ownership of a broadcast property is capped at 25%.

“At no time since the (foreign ownership) rule’s promulgation in 1982 has the commission ever expressed any intent not to apply that rule, nor has the commission even considered a repeal of the rule,” wrote Primestar Partners. Included in the Primestar partnership are Tele-Communications Inc., Time Warner, Cox Communications and Comcast. Primestar called for a thorough investigation of MCI’s foreign ownership. BT already owns 25% of MCI, and other foreign stockholders bring the long distance company’s alien ownership to almost 35%.

Also filing against the MCI license Monday was Echostar, which is already competing in the DBS business. Like Primestar, Echostar insists that MCI needs a waiver from U.S. foreign ownership rules before it can be awarded the license.

Under current policy, the FCC does not award foreign ownership waivers unless the home market of the foreign company is open to competition from U.S. companies. Echostar urged the FCC to investigate the home markets of BT (Britain) and News Corp., (Australia). “Barring the submission of satisfactory evidence regarding the opportunities of U.S. DBS operators in the United Kingdom and Australia, the commission should hold MCI ineligible to hold a DBS permit,” Echostar wrote.

Scathing critics

The most scathing criticism of the FCC staff decision came from the Media Access Project, a public interest group representing the 50-year-old National Assn. for Better Broadcasting. “(T)he staff authorized MCI to receive a commission license without establishing its citizenship, character and other qualifications as is required of all applicants for broadcast licenses,” wrote MAP. MAP added that the FCC staff’s decision-making logic “would permit convicted murderers, swindlers and child abusers to apply for and receive broadcast licenses and renewals in their jail cells.”

In one piece of good news for MCI and the FCC, the Supreme Court refused Monday to review the appeal of Advanced Communications. Until 1995, Advanced held the license purchased by MCI. The FCC reclaimed the li-cense from Advanced, claiming the company had forfeited its right to launch a DBS service because it had done nothing with the license for more than 10 years.

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