FCC to Approve DirecTV’s Transfer to Liberty Media This Week
The FCC will approve the $11 billion transfer of a controlling stake in DirecTV to Liberty Media from News Corp. this week, commission officials said. FCC Chairman Kevin Martin’s draft order to clear the deal (CD Feb 11 p4) has three “yes” votes including his, sources said. The order he circulated Feb. 6 would approve the deal subject to two conditions. The other two commissioners agreed to vote on it Friday at the latest, the sources said, but the final order may not be released immediately if the commissioners agree on last-minute changes.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The order approved by three commissioners requires Liberty Global, an affiliate of John Malone’s Liberty Media, to sell its Puerto Rico cable systems, said FCC sources. It also requires DirecTV to continue meeting program-related conditions that the commission imposed on it in clearing the sale of a large part of the company to News Corp. Martin said Feb. 8 that those were the only two conditions in his draft. Representatives of the FCC, DirecTV and News Corp. declined to comment. A Liberty spokesman didn’t immediately return messages.
At least one commissioner is considering proposing another condition, sources said. It would require DirecTV to eventually carry the signals of TV stations in all 210 markets served by the satellite-TV provider, they said. On Tuesday, the NAB again requested that provision. DirecTV provides so-called local into local service in 144 markets, said NAB. That leaves 66 markets left for DirecTV to fulfill a promise provide service in all recognized markets by year- end, the NAB’s FCC filing said. It said DirecTV made the promise in 2003, when it sought FCC approval for the sale of control of the company to News Corp. from General Motors. The FCC approved that deal in December 2003 but didn’t require the company to serve every market with local broadcasters’ signals.
Martin may get a 5-0 vote even if he doesn’t agree to include that condition, sources said. But there’s a chance of a full or partial dissent if he doesn’t, a source said. Martin’s programming condition likely would prevent DirecTV from withholding some content from pay-TV rivals. Liberty Global, an owner of cable systems primarily outside the U.S., has bids for the Puerto Rico properties serving about 90,000 subscribers, Wachovia analyst Jeff Wlodarczak wrote in a recent investor note.
DirecTV soon will carry TV stations in 150 markets, President Chase Carey told Commissioners Jonathan Adelstein and Robert McDowell and an aide to Commissioner Michael Copps in separate meetings Friday, said an ex parte filing. Another DirecTV executive met that day with an aide to Commissioner Deborah Tate. The company has started work on a plan to offer “a seamless, integrated local channel package in all markets” by year’s end, said the filing. It didn’t specify how it would do that. An industry source said the company may provide such service through satellite or by using over-the-air DTV tuners. “For those concerned about consolidation of media companies, Mr. Carey emphasized that the transaction would result in de-consolidation by removing News from the DirecTV ownership chain and divesting Liberty’s interest in News,” the filing said. DirecTV has a “strong desire to provide local service via satellite in as many markets as possible.”