- Sep 8, 2003
From our friends at SkyReport.com
A group of cable companies scrutinizing News Corp.'s proposed takeover of DirecTV and Hughes wrote the Federal Communications Commission last week with concerns on the pending transaction. Again, they took issue with the vertical integration the deal may create for the media company.
The companies - Advance/Newhouse, Cable One, Cox and Insight - said they recently reviewed documents related to the transaction at the FCC and Justice Department, some of which contained sensitive company information. The companies didn't release confidential information, but they said the documents validate their concerns with the proposed deal.
"The acquisition of DirecTV's national distribution platform provides News Corp. with a guaranteed path into every television household in the country for its FOX broadcast and cable content," the group told the FCC. "Control of this national distribution platform lowers substantially the costs and risks to News Corp. of withholding programming from cable operators attempting to resist higher prices for 'must-have' FOX broadcast and regional sports programming."
The group said News Corp. could use its control of the satellite TV service "as a negotiating weapon to inflict higher prices on cable operators and their subscribers."
The News Corp./DirecTV transaction remains before the FCC and antitrust officials at the Justice Department.