Powell Has DirecTV concerns

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Scott Greczkowski

Scott Greczkowski

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WASHINGTON, Oct 30 (Reuters) - U.S. Federal Communications Commission Chairman Michael Powell has concerns about News Corp.'s purchase of a controlling stake in satellite television service DirecTV that may necessitate more conditions, a source familiar with the situation said on Thursday.

Powell has previously said the agency would focus in its review on the combined company's potential power over content distribution. News Corp. owns a television network, movie studio and a television program production studio.

"He has concerns that may require additional conditions," the source said, declining further identification. The source also declined to describe what those additional requirements could be.

News Corp. Ltd. has proposed acquiring for $6.6 billion a 34 percent controlling stake in Hughes Electronics(GMH). The deal would give News Corp. possession of DirecTV, a Hughes unit that is the No. 1 U.S. satellite television service with almost 12 million subscribers.

Rupert Murdoch, chairman of the media conglomerate, made the rounds meeting with FCC officials, including Powell and other commissioners, people familiar with the agency said. Murdoch did not offer new concessions during the meetings, they said.

The FCC hopes to wrap up its review by the end of the year. The deal is also being examined by the U.S. Justice Department and analysts have said they expected the two agencies to give the green light to the deal.

Andrew Butcher, a spokesman for News Corp., declined to comment while Robert Mercer, a spokesman for DirecTV, had no immediate comment.

News Corp. owns the Fox television network as well as 20th Century Fox movie studios and 20th Century Fox television studios, sparking fears by consumer groups that they could demand high prices from rivals for content.

Lawmakers earlier this year asked Murdoch to pledge to make Fox local broadcast channels available to rival satellite television provider EchoStar Communications and cable operators on the same terms as DirecTV.

Murdoch balked at that request but did agree to make sports programming available on the same terms to rivals. News Corp. had already agreed to concessions that would make sports and local broadcast stations available to competitors at a reasonable cost.

DirecTV has also committed to offering local television channels in 100 markets by the end of the year with the goal of offering them in all 210 markets by 2006 but no later than 2008.

The executive complained that competitors were trying to load up the deal with unreasonable concessions that would put his company at a competitive disadvantage. REUTERS
 
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