- The Washington Times - Friday, May 9, 2003

ASSOCIATED PRESSNews Corp. Chairman Rupert Murdoch faced questions about rising cable TV costs and media consolidation yesterday as he tried to win congressional support for a proposed acquisition of DirecTV, the nation’s largest satellite-television provider.”We believe the strength of satellite is to give the public choice,” he told the House Judiciary Committee.News Corp. struck a deal in April to acquire 34 percent of Hughes Electronics Corp., the division of General Motors that operates DirecTV. The deal, valued at $6.6 billion, has yet to be approved by federal regulators.The Federal Communications Commission rejected a proposed deal last year between DirecTV and its chief competitor, EchoStar.Some fear the combination of DirecTV’s distribution system with News Corp.’s programming entities, such as Fox, Fox News Channel and FX, could mean higher prices for consumers and push small-market cable companies out of business.”The federal government should not let this Fox into the DirecTV henhouse,” Neal Schnog, the head of Uvision, a small-market cable company in Oregon, told the committee.Mr. Schnog, vice chairman of the American Cable Association, said that Mr. Murdoch’s company would use its DirectTV holdings to squeeze more money out of cable operators, or simply deny them affordable access to channels, driving cable customers toward the satellite system.Gene Kimmelman, a senior director at the Consumers Union advocacy group, said the proposed merger “is truly bad for consumers” because it could lead to price increases for both cable- and satellite-television customers.Mr. Murdoch countered that the company’s self-interest is to put as many channels as possible on DirecTV, and scoffed at the notion he would ever pull News Corp. programming from his possible satellite competitor, Echostar.”It would be madness if I was to deny Echostar the Fox signal,” said Mr. Murdoch. “It would cost us at least $400 million a year.”Mr. Murdoch insisted the deal would bring more benefits to rural areas. He said a major focus of the new company would be to provide high-speed Internet access to sparsely populated areas.Some committee Democrats questioned whether an increase in his influence over U.S. media outlets would foster or stifle political viewpoints.Rep. Maxine Waters, California Democrat, said that as a liberal, she felt Fox News Channel acted as “a cheerleader” for the Bush administration.”You’re scaring the hell out of me,” she told Mr. Murdoch.Mr. Murdoch said his company has always worked to diversify national television content.


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