FCC approves DirecTV takeover
EmptyWASHINGTON -- The FCC on Monday approved Liberty Media Corp.'s takeover of DirecTV, the nation's top satellite TV broadcaster, settling a long-running dispute between two powerful media figures, Rupert Murdoch and John Malone.
Under the deal, Malone will give up Liberty's 16.3% stake in News Corp., pay $550 million in cash and give three regional sports networks to News Corp.
Malone surprised Murdoch two years ago by suddenly accumulating a stake in News Corp.'s voting shares, potentially challenging Murdoch's control of the global media conglomerate he built. News Corp. adopted anti-takeover defense measures that were later challenged by shareholders.
While the FCC cleared the way for the deal, it added a few strings, requiring Liberty and DirecTV to abide by program access, program carriage, Regional Sports Network arbitration and retransmission consent arbitration conditions thst were modeled on similar conditions imposed in 2003, when the Commission approved the transfer of DirecTV from Hughes to News Corp.
In addition, the order requires that all of the attributable ownership interests connecting DirecTV Puerto Rico and Liberty Cablevision of Puerto Rico, Ltd., which will be under common control as a result of the transaction, be severed within one year, at which point the companies must certify either that they have reduced the relevant interests to a non-attributable level or that they have filed any applications necessary to divest assets.
While the commission approved the deal, the panel's two Democrats had some trouble with it.
Although commissioner Michael Copps approved the deal, he said commission policies that set the stage for it should never have been allowed.
"This transaction is hardly an occasion to jump for joy," he said. "The Commission should be waging a proactive battle against harmful media consolidation, not simply accepting small levels of deconsolidation when it comes."
Commissioner Jonathan Adelstein said the deal "substantially frustrates important objectives of the Communications Act and long-standing policy goals of the Commission."
In particular, he had trouble with the FCC's refusal to force the company to provide local-to-local service in all markets.
"Perhaps because I am from rural America, I can appreciate fully the discouraging impact that the lack of DBS local-into-local service has on the video choices of rural households," he said.
Concerns aside, the commission's vote allows the deal to move forward.