FCC Approves News Corp.'s DirecTV Bid
Federal regulators Friday narrowly approved News Corp.'s $6.6-billion takeover of DirecTV but imposed conditions aimed at limiting the ability of the nation's largest satellite TV provider to dominate media markets.
In a 3-2 vote along party lines, Federal Communications Commissioner Jonathan S. Adelstein joined fellow Democrat Michael J. Copps in opposing News Corp.'s purchase of a controlling stake in DirecTV. They said more stringent conditions were needed to prevent News Corp. Chairman Rupert Murdoch -- whose empire includes Fox Broadcasting, two dozen cable channels and 35 television stations in 26 cities that reach 44% of U.S. households -- from squeezing or retaliating against rivals that don't play by his rules.
"With this unprecedented combination, News Corp. could be in a position to raise programming prices for consumers, harm competition in video programming and distribution markets nationwide and decrease the diversity of media voices," Adelstein said in a statement.
Minutes after the FCC vote, the Justice Department, which had been conducting its own antitrust review of the deal, announced it would not oppose it.
For weeks, FCC officials had indicated that the deal would be approved with conditions. Most of the FCC commissioners, including Copps and Republicans Kevin J. Martin and Kathleen Q. Abernathy, had cast their ballots days ago.
On Friday, FCC Chairman Michael K. Powell began negotiating with Adelstein, who hadn't yet voted, in hopes of winning a bipartisan majority.
The talks lasted late into the evening, with Adelstein pushing for conditions that would require DirecTV to offer local stations in all its television markets by the end of next year. Powell rebuffed that suggestion and stuck with allowing News Corp. a longer timetable.
Still, several conditions imposed Friday had some analysts wondering just how significant a victory Murdoch had won.
Under the conditions, News Corp. must for the first six years submit to arbitration to resolve any disputes that could crop up with EchoStar Corp., Time Warner Inc. and other competitors that carry News Corp.'s broadcast and cable channels.
That is aimed at addressing concerns that Fox would yank its network programming off of rivals' outlets to encourage their viewers to defect to DirecTV.
