White House asks for review of MCI's DBS rights

WASHINGTON — The Clinton Administration just added another problem to News Corp.’s troubled efforts to enter the U.S. satellite broadcasting business.

In a letter signed by three separate federal agencies, the Clinton Administration on Monday asked the Federal Communications Commission to review MCI’s right to own a DBS license. Through its joint venture with MCI, News Corp. is depending on that license as an entry ticket to the DBS business this September.

The administration’s letter raises questions about potential conflicts with current foreign ownership law which bars aliens from owning more than 25% of a broadcast license. The letter, signed by representatives of the State Dept., Commerce Dept. and the Office of the U.S. Trade Representative, challenges an earlier ruling by the FCC that found the foreign ownership restrictions did not apply to subscription services such as DBS.

Policy questions exist?

“We believe that significant policy questions continue to exist regarding foreign ownership of DBS subscription services on U.S. licensed satellites,” wrote the administration officials. “We recommend full commission review of such issues before reaching a final determination on any application that involves foreign ownership.”

News Corp. officials could not be reached for comment Monday. An MCI spokesman said Monday his company was not troubled by the administration’s position.

In American hands

Both Australian-owned News Corp. and MCI, which after its merger with British Telecom will be a British company, have said they planned to create a corporate structure that would leave the DBS license in American hands. However, the administration letter could eventually lead to a decision by the FCC to take a close look at any U.S. corporate entity set up to hold the license.

The Clinton Administration letter comes exactly one week after News Corp.’s planned joint venture with EchoStar began to crumble.

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