FCC Removes Final Conditions To News Corp.'s Purchase Of Hughes' DirecTV Stake

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The Federal Communications Commission has removed the last conditions on News Corp.'s purchase of a major stake in DirecTV from Hughes Corp.

Some public-interest groups and competitors -- including Dish Network and the American Cable Association -- had opposed liting the conditions on the company, but it seemed all but a foregone conclusion after New Corp. dealt off that 41% stake to Liberty in 2008, or what the FCC described as a "material change in circumstance."

At the time of its approval of the deal, the FCC lifted some of the conditions, including the program-access condition, but not all.

The remaining conditions required News Corp. to participate in arbitrations disputes over carriage of regional sports networks and participate in arbitration over retransmission consent negotiations with multichannel video providers.

"The commission adopted the arbitration conditions to address the same underlying concern as the program access condition - to prevent a vertically integrated News Corp. from using its programming as a means by which to confer on itself and DirecTV an anticompetitive advantage that would harm the public interest," the commission said. "Absent vertical integration between News Corp. and DirecTV," the FCC said, "the arbitration conditions serve no transaction-related purpose."

The FCC refused to delay lifing the conditions until it decides on its open inquiry on program access in general. News Corp. had countered that suggestion by saying it was unfair to continue to make it adhere to comditions that the FCC may or may not require as part of its larger review of program access.

The FCC did say anyone who had filed complaints before the order was released can still pursue them, which pleased at least one group.

"Although we are disappointed that the commission decided to lift the consumer-friendly conditions prior to the previously adopted January 2010 sunset," said the American Cable Association President Matthew Polka in a statement, "the American Cable Association applauded the FCC for insisting that ACA members that had filed formal demands or provided notice to commence arbitration with News Corp. through today would retain their rights under the News Corp.-Hughes/DirecTV order approved in 2003." 

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