Washington -- Appearing before a House committee Thursday to defend his
latest media play, News Corp. chairman Rupert Murdoch rejected suggestions that
he needed to expand programming commitments as part of securing control of
DirecTV Inc. parent Hughes Electronics Corp.
Murdoch's company has volunteered to abide by federal program-access laws
giving his competitors access on fair terms to a stable of News Corp. cable
networks until 2007, when the rules would expire. News Corp. is currently
covered by the rules, but certain asset sales would change that.
But when Rep. Rich Boucher (D-Va.) pressed him to make his program-access
commitment good beyond 2007, the media baron refused to yield.
"No, we would not agree to that. We don't think it would be fair to be
committed by a rule that none of our competitors would be affected by," Murdoch
said. "We would put ourselves at a permanent disadvantage to all of our
competition if we accepted your suggestion."
Murdoch -- who spent about two hours total before the House Judiciary
Committee -- shot down another Boucher idea. The lawmaker asked if Murdoch would
waive all consideration in order for rivals, such as EchoStar Communications
Corp., to gain access to local Fox TV signals.
"No, I wouldn't," Murdoch said. "As far as we are concerned, I would just
point out that it would be madness if I were to deny EchoStar the Fox signal,
the Fox stations. It would cost us at least $400 million per year, and I am sure
that Mr. [EchoStar chairman and CEO Charlie] Ergen could do other things to me
in retaliation that would cost me another $400 million per year."
Murdoch said he hoped the merger would allow DirecTV to serve all 210 markets
with local TV signals, to expand high-definition TV service and perhaps to make
direct-broadcast-satellite-delivered broadband access a reality.
Murdoch told the panel he planned to discuss with Ergen ways in which the two
could share the cost of expanding local TV service into small markets. EchoStar
did not have an immediate comment.
Neal Schnog, vice chairman of small-operator cable group the American Cable
Association, testified that the merger should blocked.
He alleged that News Corp. would use its control of content and distribution
to force small cable companies to pay rich sums for programming they didn't want
or deny them access to programming services they would need to remain
competitive with DirecTV.
"If this merger proceeds, the reality will be like the Fox show Joe
Millionaire. The merger has superficial appeal, and its stars are smooth
talkers. But at the end of the show, the ugly truth will emerge," Schnog
Murdoch denied any anti-competitive aims and indicated that he would not
object to public disclosure of his programming-license fees, asserting that the
fees are no secret among industry players.
For example, he said, it was widely known that Fox News Channel was one-half
as expensive as Cable News Network.
In a statement that stunned Schnog, Murdoch said distributors were mainly the
ones that insisted on license-fee confidentiality. "I do not wish to vex Mr.
Schnog at all," he added.