FCC OKs News-Hughes Merger

Rupert Murdoch got his direct-broadcast satellite company.

The Federal Communications Commission late Friday approved News Corp.’s takeover of DirecTV Inc. parent Hughes Electronics Corp., with certain conditions, AP reported.

The Department of Justice said it would not oppose the $6.6 billion deal.

The commission said News Corp. must agree to arbitration to solve disputes with companies that carry its broadcast and cable channels, such as cable companies and other satellite providers. And it must treat all stations equally, and not tilt in favor of its Fox broadcasting network and its cable networks, such as FX.

"This merger, with strict conditions, ultimately benefits the American public," FCC chairman Michael Powell said in a prepared statement. "News Corp. has a history of taking significant risks and introducing new and innovative media services. Enhanced competition will increase pressure to improve service and lower prices for both cable- and satellite-television subscribers."

But Democratic commissioner Michael Copps, who opposed the merger, said, "Where is the logic -- where is the public-interest benefit -- of giving more and more media power to fewer and fewer players?"

And Democratic commissioner Jonathan Adelstein said he dissented because the deal does not require DirecTV to provide local channels to every television market.

"The FCC's approval of News Corp.'s acquisition of DirecTV should put to rest any remaining questions about the robustness of competition in the multichannel-video marketplace," National Cable & Telecommunications Association president and CEO Robert Sachs said in a prepared statement.

"Rupert Murdoch is a tough competitor, so adding his global media assets to DirecTV makes DirecTV a very formidable competitor," Sachs added. "However, cable operators are also very well-positioned to compete with satellite by offering consumers an attractive array of services such as video-on-demand, high-speed Internet and cable phone service that satellite doesn’t offer."