FCC Stops News-Hughes Merger Clock


News Corp.’s proposed takeover of DirecTV Inc. parent Hughes Electronics Corp. was put on temporary hold by the Federal Communications Commission Friday.

In a letter to lawyers for both companies, the commission said it needed time to discuss merger details with the Department of Justice. The FCC also notified the companies that it intended to seek additional merger information from them shortly.

The FCC stopped the clock with 31 days remaining. News Corp. officials are hoping to complete the transaction by the end of the year. News is seeking approval to control 34% of Hughes.

A News Corp. spokesman would not comment on the record about the FCC action.

"The FCC notified us today that it is stopping the 180-day clock concerning the license-transfer applications related to the proposed acquisition by News Corp. of 34% of Hughes," Hughes spokesman Bob Marsocci said Friday afternoon.

"This is a routine development that was not unexpected because additional coordination between the FCC and Department of Justice is required," he added. "We remain cautiously optimistic that the FCC and Department of Justice will approve the transaction in the same time frame as previously anticipated."

The FCC’s action could be a signal that the agency wants to take a closer look at merger concerns raised by Cox Communications Inc., Advance/Newhouse Communications, Cable One Inc. and Insight Communications Co. Inc. Those companies argued that News Corp. can use DirecTV to raise the price of programming for both cable and satellite consumers.

The leaders of the Senate Antitrust Subcommittee are demanding regulatory conditions on the News-Hughes deal based in part on cable-operator objections.

Sens. Mike DeWine (R-Ohio) and Herb Kohl (D-Wis.) argued in a recent letter to FCC and DOJ officials that the News-Hughes combination has the potential of driving retail cable and satellite prices higher and of excluding new programmers from the pay TV distribution market.

"We believe that this transaction should only be approved upon the adoption of certain conditions necessary to avoid the risk of injury to competition and competitors," the lawmakers said.

News Corp. has agreed to pay $6.6 billion for a controlling stake in Hughes, which owns the 11 million-subscriber DirecTV satellite-TV service.