FCC Seeks More Data from News-Hughes

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The Federal Communications Commission is seeking more market data from News
Corp. and Hughes Electronics Corp. in connection with the $6.6 billion merger
that would give Rupert Murdoch operating control of DirecTV Inc.

The FCC sent a letter along with a 10-page questionnaire that asked highly
specific questions about how each company operates in the market today and how
they expect to operate together if the merger were approved. Their responses are
due by Aug. 6.

Although the FCC is expected to approve the merger, the agency is seeking
extensive information from the companies about programming contracts,
retransmission-consent agreements and corporate governance.

News Corp. has claimed that a Hughes audit committee would ensure that
DirecTV would not be overcharged for Fox programming.

Some in the cable industry are concerned that Murdoch would overwhelm the
audit committee and require DirecTV to pay rich prices for Fox programming. If
that happened, the cable companies believe they would be forced to pay DirecTV's
rates and would have a hard time proving that Murdoch was charging cable
discriminatory rates.

In its letter, the FCC asked several specific questions about the audit
committee, including its autonomy to review "related party contracts" between
Hughes and News Corp.

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