WASHINGTON — News Corp. topper Rupert Murdoch emerged from a Senate hearing with only minor scrapes and bruises and few signs there will be enough Capitol Hill resistance to interfere with his proposed acquisition of DirecTV.
In calm, methodical terms, Murdoch aimed to assure senators that he would not harm competition or raise prices on consumers if Washington allows the merger.
“This transaction will only increase the already-intense competition in the programming and distribution markets,” Murdoch told the Senate Commerce Committee.
In early April, News Corp. and Hughes Electronics agreed to a $6.6 billion deal that would allow Murdoch to purchase 34% of Hughes and control subsidiary DirecTV.
Just last year, the Federal Communications Commission rejected EchoStar’s proposed takeover of DirecTV because the two are direct competitors.
Keeping two birds in flight
Most antitrust experts believe Murdoch’s deal will go through as News Corp. is not a direct competitor of DirecTV and the deal will help to ensure there are at least two satcasters in the market.
Still, Sen. Barbara Boxer (D-Calif.) took Murdoch to task for recycling his own conservative views throughout his numerous news and entertainment media.
“If you honestly believe Fox News is fair and balanced, I’m really stunned,” she told Murdoch. “I do think it’s fair and balanced — between the right and the far right.”
Murdoch occupied the hot seat at a hearing largely devoted to an impending relaxation of media ownership restrictions at the FCC.
Independent writer and producer Tom Fontana sat on the same panel. He was there to testify on behalf of the Writers Guild of America East and the Caucus for Television Producers, Writers and Directors, who have lobbied to protect the current FCC rules.
Drawing from personal experience, Fontana argued that the FCC should force the major nets to set aside a portion of their schedules for indie programming, what some have argued would amount to a return to the fin-syn rules dropped eight years ago.
To Fontana, fin-syn is not a dirty word. He started his career 20 years ago when the rules were still in place. Back then, he worked for Mary Tyler Moore Enterprises on the show “St. Elsewhere.” He then moved on to Reeves Entertainment, where he produced “Homicide: Life on the Street,” before creating HBO’s “Oz” for Rysher Inc.
“What do these three independent production companies have in common?” he asked. “They are all out of business, swallowed up by conglomerates, in part, as a result of the elimination of the fin-syn rules.”
Since the rules were dropped, Fontana claimed there has been a sharp decline in the percentage of network programming devoted to indie-produced fare. In 1992, he said 15% of the new primetime series were produced by the nets; in 2002, that proportion increased to 77%.
Sen. John McCain (R-Ariz.), who chairs the committee, predicted the FCC would not address the fin-syn question in its June 2 decision but pledged to review the issue at a later date.
McCain’s counterpart in the House, Rep. Billy Tauzin (R-La.), spent Thursday convincing CBS execs to reconsider a threat to suspend its HDTV programming this summer if Congress and the FCC have done nothing to protect content from being stolen.
Tauzin sent Viacom president Mel Karmazin and CBS Television chairman Leslie Moonves a letter asking them to reconsider and pledging to assist the FCC in taking action by the fall or the end of the year at the latest.
The letter apparently did the trick. Late Thursday, CBS reversed itself, promising in a statement to continue a full schedule of HDTV sports and entertainment this summer.