News Corp. Fights RSN Condition on DirecTV Deal

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Sep 8, 2003
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Personnel representing News Corp. at the Federal Communications Commission approached commissioner staff on proposed conditions tied to its pending takeover of DirecTV and Hughes, urging regulators to reject a provision concerning Fox regional sports channels and their carriage on cable systems.

Specifically, News Corp. said the FCC should not adopt conditions that would force Fox regional sports networks to continue providing signals to cable operators in the absence of a contract between the parties. The media giant said DirecTV's competitors need an incentive to negotiate with Fox over carriage, and arbitration between the sides should be a last resort.

"If Fox is forced to continue providing the RSN (regional sports network) signal throughout the arbitration procedure, MVPDs (multichannel video providers) will have little incentive to negotiate a mutually acceptable business arrangement with Fox," the company said in a FCC filing. "Arbitration will become the rule rather than the exception. The result will be dozens - if not hundreds - of costly arbitrations and potentially FCC reviews, to the detriment of Fox and ultimately for the public."

The News Corp. meetings at the Portals took place earlier this week. They included meetings with staff for Commissioners Kevin Martin, Michael Copps and Kathleen Abernathy.

Also this week, personnel representing a group of cable operators made the rounds at the commissioner offices, addressing concerns with the proposed transaction.

The group said News Corp./DirecTV deal conditions should address the potential threat of News Corp. withholding or threatening to take away must-have Fox programming, including regional sports channels and broadcast content, as a means of "extracting supracompetitive prices" from services competing with the satellite TV service.
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