FCC gets clues to DirecTV plan

News Corp. offers self-imposed restrictions

WASHINGTON — Rupert Murdoch’s News Corp. filed its application for FCC permission to take control of DirecTV late Friday, the first step toward gaining government approval of the $6.6 billion deal.

Pact would significantly expand Murdoch’s worldwide satellite and entertainment empire and hand him digital delivery into 11 million U.S. homes.

The application starts the FCC’s 180-day clock for acting on mergers.

The Justice Dept. also must approve the proposed merger between News Corp. and Direct TV parent company Hughes Electronics (which is owned by General Motors).

Preaching reach

In the FCC application, News Corp. promised to expand DirecTV’s reach to as many of the 210 U.S. TV markets as “economically and technologically feasible.”

News Corp. also offered two self-imposed restrictions, an effort to placate consumer and industry groups alarmed about the danger of allowing one company to gain excessive control over local, national and international media properties.

First, the company vowed to operate under the same program access rules that apply to cable. It also promised not to discriminate against rival distributors when it comes to programming or enter into exclusive contracts with any distributor.

Most antitrust experts believe the acquisition won’t meet strong resistance in Washington because one satellite service is not buying another.

But there are concerns about News Corp. owning the Fox Network and the Fox studio, programming companies and DirecTV, a distribution platform.

Just 18 months ago, Murdoch tried to acquire DirecTV but was outbid by satellite giant EchoStar. The Justice Dept., and the FCC subsequently quashed that deal.

Friday’s filing flat-out denied the massive deal presents any opportunity for abusive practices because the two companies operate very different businesses.

“News Corp. has no market power in the programming market, and DirecTV has no market power in the (multichannel-video-program-distribution) market that either could leverage for anti-competitive purposes,” the filing claimed.

Nothing binding

But Chris Murray, a lawyer for Consumers Union, argued that these self-imposed rules don’t prevent Murdoch from hiking programming prices across the board.

“It’s a staggering amount of power and reach for any one company to have,” he remarked.

Consumers Union will get a chance to sound off on the merger Thursday during a House Judiciary Committee meeting on competition issues in the satellite service industry.

Murdoch is skedded to appear, along with Uvision prexy and American Cable Assn. vice chairman Neal Schnog and antitrust attorney Kevin Arquit.

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