DirecTV Transfer to Liberty Okayed in Martin’s Draft Order
Transfer of a $13 billion controlling stake in DirecTV to Liberty Media from News Corp. is conditionally approved in a draft order FCC Chairman Kevin Martin circulated to all other commissioners for a vote by Feb. 26. The chairman told reporters Friday he'll put the order on that day’s meeting agenda if it’s not voted on earlier. For the deal to go through, Martin said, Liberty Chairman John Malone would have to divest a stake he has in a cable operator in Puerto Rico, since DirecTV also serves the island. Liberty would also have to continue to abide by programming-related conditions imposed as part of the commission’s approval of the DBS provider’s transfer in 2004 from General Motors to News Corp.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Small cable operators and EchoStar have asked the FCC to impose those types of curbs on the deal, which they fret could consolidate control over more programming in the hands of Malone. Liberty also owns stakes in a variety of other media companies. The company expects to complete its purchase of DirecTV by this quarter’s end, said a spokesman. “We're pleased with the appearance that there’s progress being made to getting closure on the deal,” he said. Spokespeople for DirecTV and EchoStar declined to comment.
The FCC could end up approving the DirecTV deal before the Justice Department. The FCC often waits for Justice to act on mergers before commissioners consider deals. But the FCC acted before Justice in past deals. The agency approved DirecTV’s transfer to News in 2003. “We haven’t coordinated, but we have decided to go forward on this one,” said Martin of Justice. “I don’t know either what they'll end up doing.” The chairman declined to comment on the commission’s review of XM’s purchase of Sirius.
In addition to DirecTV, Martin wants commissioners to vote Feb. 26 on three other media items, all related to the DTV transition. One deals with “technical issues” related to the transition, he said, saying it won’t have much substantive impact. Another item would require satellite companies to provide their subscribers with all digital stations in a market when they carry the signals of any broadcaster. That would extend the DBS so-called carry-one, carry-all rule for analog broadcasts to digital. The current DBS item is an order, said other FCC officials.
The final DTV item proposes to require all low-power broadcasters to switch to all-digital broadcasts by 2012, said Martin. That item is a notice of proposed rulemaking, said Community Broadcasters Association Executive Director Amy Brown, who supports it as long as her members get more money to make the transition. (See separate report in this issue.)