Advance/Newhouse Communications chairman Robert Miron and News Corp. chairman
and CEO Rupert Murdoch sparred before a Senate subcommittee Wednesday over
Murdoch's plan to take control of DirecTV Inc., the largest satellite-TV
provider, with more than 11 million subscribers.
Miron said the inevitable result of the merger was that Murdoch would have
the ability and incentive to drive up retail cable and satellite rates by
demanding higher compensation for his 35 TV stations, 18 regional cable sports
networks and national cable services such as Fox News Channel.
"We believe they have the incentive to do just that," Miron said. "Prices
will go up for DirecTV customers, EchoStar [Communications Corp.] customers and
cable customers. We believe the impact will be substantial nationally."
Murdoch -- making his third trip before a congressional panel within six
weeks -- said it cost him $640 million in payments to cable operators to launch
Fox News a few years ago as a result of tough bargaining with MSOs, which, he
added, are quite capable of fending for themselves without government help.
"We are not dealing with a bunch of virgins here," Murdoch said.
Miron and Murdoch squared off before the Senate Subcommittee on Antitrust,
Competition Policy and Consumers Rights, where lawmakers from both parties
expressed concern about Murdoch in control of DirecTV and whether the deal would
trigger others like it.
"Critics of this deal have raised concerns about whether News Corp. will use
its additional leverage as an anti-competitive weapon to unfairly disadvantage
other programmers and distributors," said Sen. Mike DeWine (R-Ohio), chairman of
Miron added that if a cable operator didn't take Murdoch's programming deals
with the higher rates, Murdoch would run his cable networks exclusively on
DirecTV and start siphoning off cable subscribers.
Murdoch said it would be "totally self-destructive" to withhold programming
from cable companies that serve nearly 70 million subscribers.
Miron called for "appropriate conditions" on the merger, but he was not more
Miron also testified on behalf of Cox Communications Inc., Insight
Communications Co. Inc. and Cable One Inc., which, combined, serve about 10
Murdoch said Miron and the cable companies were less concerned about rising
rates than about clinging to their huge market share.
"The effort of Mr. Miron and his associates here is simply to try to stop us
from being competitive any way they can," he added.