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ACA Demands Restraints on News Corp./DirecTV

The trade group for cable operators that don’t own programming channels is calling on the Federal Communications Commission to saddle the News Corp./DirecTV Inc. merger with conditions governing retransmission consent for Fox Television channels, access to News Corp.-owned cable networks and DirecTV’s use of exclusive programming packages.

American Cable Association officials predicted that without restrictions, News Corp. will try to drive consumers to DirecTV in markets served by smaller cable systems by driving up costs to access company-owned broadcast and pay TV programming.

"News Corp./DirecTV will have strong incentives and ample ability to reduce or eliminate competition in many smaller markets and raise costs for consumers," the ACA said in a filing with the FCC Monday.

Specifically, the trade group demanded that News Corp. be required to:

• Offer cable systems with fewer than 5,000 subscribers retransmission-consent contracts for Fox Television stations without also insisting that the operators carry News Corp.’s pay TV networks, and offer larger systems retransmission contacts on terms no more costly than they received immediately before the DirecTV merger;

• Bargain with small cable companies on a group basis;

• Offer pay TV to the National Cable Television Cooperative on the same effective terms as offered to DirecTV; and

• In markets where DirecTV offers local broadcast channels, the signals of those stations must be offered to cable operators on nondiscriminatory prices when the cable operators cannot received good-quality signal off-air signals or have been given the stations’ permission to receive the signal in that manner.

The ACA demand came one week after the FCC disclosed that it has asked DirecTV to spell out details of a 2000 retransmission fight between The Walt Disney Co. and Time Warner Cable and whether it was able to boost subscribership because of the spat.