NCTA Won't Battle Murdoch's Deal


Washington— Cable respects News Corp. chairman Rupert Murdoch as a tough competitor, but the industry is unlikely to seek government conditions on Murdoch's proposed takeover of DirecTV Inc.

For many years, the National Cable & Telecommunications Association has refrained from seeking conditions on mergers involving broadcasting and phone companies, even though doing so might have given cable a competitive advantage.

Although a DirecTV in Murdoch's hands scares some in cable, NCTA is unlikely to lead a merger opponent group at the Federal Communications Commission, the Justice Department or the Federal Trade Commission.

"I don't think you are going to see NCTA or a lot of [cable] companies involving themselves in this transaction," a cable source said.

Still, the proposed merger is expected to get a thorough scrubbing by Congress and regulators. Murdoch was to meet Friday with Rep. Billy Tauzin (R-La.), the House Energy and Commerce Committee chairman.

"Given the size of the proposed deal, as well as its impact in the marketplace, Chairman Tauzin wants to talk to Murdoch and [General Motors CEO] Rick Wagoner before passing judgment," said Tauzin spokesman Ken Johnson.

Johnson suggested that Murdoch's takeover of DirecTV might leave EchoStar Communications Corp. CEO Charlie Ergen as the odd man out and force him to sell his DBS firm to a media giant.

"The merger has the potential to create some seismic shifts. Will Charlie Ergen rush to the altar to partner with some other media powerhouse?" Johnson asked.

While NCTA intends to skip the fight, the small-operator American Cable Association intends to use the merger to highlight what it considers unfair business practices by News Corp. in negotiations for carriage of the company's Fox Broadcasting Co.-owned TV stations, deals that often include demands for carriage of Fox-owned cable networks.

"Equal access to programming is a vital issue for smaller, independent cable businesses," said ACA president Matt Polka. "Program access is even more important now that Fox is no longer just a formidable programmer, but also a formidable competitor."

Murdoch promised to comply with FCC program access rules. But the same statement included a clause saying that DirecTV would reserve the right to carry affiliated programming on an exclusive basis.