Rural Ops Oppose News Corp.’s Relief Request At FCC
Small Distributors Maintain They Would Face Higher Programming Pricing If Conditions Lifted
By Linda Moss -- Multichannel News, 11/25/2008 4:14:00 AM
Representatives of cable companies and telcos serving rural America Tuesday voiced their collective opposition to the latest request by News Corp. to be released from conditions applied to it as part of its 2004 purchase of DirecTV.
In a letter sent to the Federal Communications Commission, responding to a Sept. 26 petition filed by News Corp., the American Cable Association, the National Telecommunications Cooperative Association, and the Organizations for the Promotion and Advancement of Small Telecommunications Companies requested that the regulatory body deny News Corp.’s request for relief from the strictures established by the 2004 News Corp.-Hughes Order.
The letter specifically cited the continued public benefit and lack of harm done to the media giant as a result of the conditions.
“The conditions placed on News Corp. continue to have substantial public interest benefits,” ACA president and CEO Matt Polka said. “Removing the conditions now would allow News Corp. to engage in the types of abusive market practices that force smaller operators and their subscribers to pay higher prices for programming.”
The conditions sought to ensure consumer-friendly obligations were placed on News Corp. regarding its Fox television stations and Fox sports networks through 2010, according to the rural operators.
If the conditions on News Corp. were lifted, small operators and their customers would be forced to pay more money for the same content, because News Corp. would be able to exercise unconstrained market power over smaller distributors – again, the rural operators argued.
Rupert Murdoch’s News Corp. had told the FCC it should be freed from the conditions because the basis for them has disappeared, since it transferred its 40% stake in DirecTV to Liberty Media in February.
In its Sept. 26 FCC filing, News Corp. said, “We explained that Fox expects to engage in carriage negotiations with several large cable companies over the next 18 months, and therefore urge prompt action.”
Fox Networks Group chairman and CEO Tony Vinciquerra met with FCC chairman Kevin Martin on Sept. 24 to stress the need for quick action on lifting the old merger conditions.
The NCTA represents more than 58- rural incumbent local exchange carriers, which include both cooperatives and commercial companies.
OPASCO represents more than 600 rural LECs and their affiliate telecommunications companies.
The ACA is a lobbying group representing 1,100 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America.
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