Consumer Groups Still Scrutinizing News Corp./DirecTV

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Sep 8, 2003
Las Vegas, Nevada
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Consumer interests continued to lobby the Federal Communications Commission with concerns about News Corp.'s proposed takeover of Hughes and DirecTV, even as the regulatory review of the deal appears to be winding down in Washington, D.C.

The Consumers Union, in a recent meeting with officials at the Federal Communications Commission, said a News Corp.-controlled DirecTV could create upward pressure on cable rates, especially with the increased leverage a national satellite system could have when combined with a media giant that may flex its muscle with must-carry and retransmission consent.

In a FCC filing detailing its meetings, the organization repeated its view the News Corp./DirecTV deal shares commonalties with the Time Warner/Turner merger in 1996. With that deal, the Federal Trade Commission established a cable programming price index mechanism to evaluate whether the merged company was raising programming prices at a more accelerated pace than historic patterns.

"A similar mechanism here would help ensure that the alleged efficiencies of this transaction will not merely accrue to the merged entities in the form of bloated market power, resulting in bulging cable bills for consumers," Consumers Union said.

Meanwhile, News Corp. Chairman Rupert Murdoch, addressing Fox Entertainment's shareholders meeting Tuesday, said the company might not make any additional concessions to regulators tied to the transaction. Murdoch said he expects the deal's review to be completed in the coming weeks, wire sources reported.
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