Murdoch Defends DirecTV Deal Before Senators

20 June 2003

US cable operators are scared of competition from a Rupert Murdoch-backed satellite broadcaster, the media mogul has told regulators.

Speaking before a Senate Judiciary subcommittee, Murdoch defended News Corporation’s $6.6 billion (€5.6bn; £3.9bn) deal to buy a 34% stake in Hughes Electronics, parent of the nation’s largest satellite-TV platform DirecTV.

The acquisition is still under scrutiny from the Federal Communications Commission and the Justice Department.

Consumer groups and cable firms have lodged opposition to the deal. Bob Miron, chief executive of cable firm Advance/Newhouse Communications, argued it would allow NewsCorp to hike prices for its programming. The purchase, he told the subcommittee, “will give NewsCorp unique and unprecedented power and incentive to raise the cost to consumers.”

Opposition has also been voiced by DirecTV’s satellite rival EchoStar, whose own bid to buy the broadcaster was blocked by regulators last year. No doubt mindful of Murdoch’s heavy lobbying against its deal, EchoStar has filed a 70-page objection to the NewsCorp purchase with the FCC.

Murdoch, however, hit back at his critics, claiming that the cable industry is “almost a de facto monopoly” and that its opposition to his deal is an attempt to protect itself from competition.

Data sourced from: The Washington Post Online; additional content by WARC staff