News Corp. Urging Removal of DirecTV Conditions

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Washington—News Corp. is urging the Federal Communications Commission to act quickly on its request to be released early from merger conditions imposed on its 2004 takeover of satellite TV provider DirecTV.

News Corp., over the objections of small cable operators, wants out of the merger conditions, saying the basis for them disappeared after it transferred its 40% stake in DirecTV to Liberty Media in February.

The FCC's conditions allowed pay-TV distributors to take News Corp. to arbitration to settle disputes over access to its TV stations and regional sports networks (RSNs).

During arbitration, the FCC banned News Corp. from withholding TV signals and the RSNs from pay-TV providers unless the pay-TV providers were making first-time requests for access.

Fox Networks Group chairman and CEO Tony Vinciquerra, joined by a pair of company lobbyists, met with FCC chairman Kevin Martin on Sept. 24 to stress the importance of lifting the merger conditions now.

"We explained that Fox expects to engage in carriage distribution negotiations with several large cable companies over the next 18 months, and therefore urge prompt action ..." Fox said in Sept. 26 filing with the FCC.

Vinciquerra also met with FCC member Robert McDowell.

Small cable operators, led by the American Cable Association, want the FCC to keep the DirecTV merger conditions in effect until their expiration in 15 months, a period that includes the current retransmission consent cycle that began Oct. 1.

In FCC filings, ACA said News Corp. should have sought early release from the DirecTV merger conditions while the Liberty/DirecTV transaction was pending at the agency.

ACA has also asked the FCC not to lift the merger conditions prior to completing a rulemaking on the wholesale cable programming market and the retransmission consent practices of local TV stations. That rulemaking is pending.

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