News-Hughes Clock Stops

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

In a letter to lawyers for both companies, the FCC said it needed time to discuss merger details with the Department of Justice. The FCC also notified the companies that the agency 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 wants to buy a 34% control stake in Hughes.

A News Corp. spokesman would not comment on the record. Hughes said in a statement: "This is a routine development that was not unexpected because additional coordination between the FCC and Department of Justice is required. We remain cautiously optimistic that the FCC and Department of Justice will approve the transaction in the same timeframe as previously anticipated."

The FCC could be signaling a closer look at merger concerns raised by Cox Communications Inc., Advance/Newhouse, Cable One Inc., and Insight Communications Co. They argued News could use DirecTV to raise the price of programming for both cable and satellite consumers.

Leaders of the Senate antitrust subcommittee are demanding regulatory conditions on News-Hughes, partly based on cable-operator objections.

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

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

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