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Murdoch Skins Italo Cat Another Way

Milan, Italy -- It seems that Italy's historical
fascination for foreigners is one that Rupert Murdoch just can't shake off.

Telecom Italia confirmed last week that Murdoch's News
Corp.'s subsidiary, British Sky Broadcasting, is negotiating to acquire a significant
stake in Stream, TI's 100 percent-owned digital-cable operation and a key player in
Italy's emerging second digital direct-to-home platform.

Murdoch failed in two previous attempts to acquire a
majority stake in local media magnate Silvio Berlusconi's Mediaset TV empire,.

Italy's financial daily newspaper, Il Sole 24 Ore,
reported that Murdoch was considering two options: a straight 49 percent share purchase,
or splitting a 39 percent share package with France's Television Par Satellite DTH
platform, which is majority-owned by terrestrial network TF1.

TI officials said the talks were at a preliminary stage,
and they were talking to "a number of potential partners."

Italy's center-left "Olive Tree" coalition
government, however, views Murdoch's fixation with Italy's TV market as
unwelcome. Prime Minister Romani Prodi was reportedly against Murdoch's attempt
earlier this year to acquire a majority stake in Mediaset.

Last week, communications undersecretary Vincenzo Vita
commented that TV is such an important sector that international alliances are
indispensable. But he added, "We need partners that are compatible with Italy and
Europe and, in that sense, the inspiration of a group like Rupert Murdoch's seems
quite far away from that criteria."

Vita spoke out after TI confirmed that it was in talks with
Murdoch, and Vita indicated that he was miffed that the Italian government -- TI's
largest shareholder -- was not informed of the negotiations.

"Although Telecom is completely independent, it would
have been polite to inform the government," Vita said.