Co-Op: Bind News to Arbitration

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News Corp. shouldn't be allowed to “escape” its obligation to submit to arbitration for its regional sports networks after it divests its ownership in DirecTV, the National Cable Television Cooperative has told federal regulators.

The Federal Communications Commission should continue to enforce certain conditions, including arbitration for some programming disputes that it imposed on News Corp. back in 2003, when it approved Rupert Murdoch's acquisition of a major stake in DirecTV, according to the NCTC.

The NCTC made its remarks in a nine-page filing March 23 with the FCC on Liberty Media's proposed $11 billion purchase of News Corp.'s 38.5% stake in DirecTV.

The NCTC, a buying cooperative for small and medium-sized cable companies, is in the midst of an arbitration proceeding with News Corp.'s Fox Cable Networks over how much its members will have to pay to carry seven FSN networks.

“It would be patently unfair and contrary to the public interest for the commission's approval of the News Corp./Liberty transactions to have the effect of terminating or otherwise interrupting any arbitration proceeding commenced under the News Corp./DirecTV order,” the NCTC said.

As one of the FCC's conditions of News Corp. buying its stake in DirecTV, distributors can submit carriage disputes regarding News Corp.-affiliated sports networks and its TV stations to arbitration.

Those conditions also said that small cable companies can designate a bargaining agent to negotiate carriage deals on their behalf.

According to the NCTC, the 2003 conditions should “continue to apply for their entire scheduled term, at minimum, to those networks or stations that are the subject of an arbitration proceeding at the time the News Corp./Liberty transactions close.”

Fox Cable couldn't be reached for comment.

The NCTC, acting as a bargaining agent, is in arbitration on behalf of 30 of its members regarding carriage deals for FSN Florida, FSN North, FSN Northwest, FSN Ohio, SportsSouth, FSN South and FSN Southwest.

As part of the Liberty-DirecTV deal, Liberty will also get News Corp.'s interests in three regional sports channels: FSN Rocky Mountain, FSN Pittsburgh and FSN Northwest. Only one of those, FSN Northwest, is currently involved in the NCTC arbitration.

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