Earlier this week, Gene Kimmelman of the Consumers Union and members of his office met with Federal Communications Commission personnel to discuss News Corp.'s pending takeover of Hughes and DirecTV, telling staff the deal could create issues for competition in the multichannel marketplace.
Consumers Union told the FCC that the News Corp./DirecTV deal could create upward pressure on cable TV rates "because of the increased leverage that a nationwide satellite system - combined with must-carry and retransmission consent guarantees for News Corp. broadcast properties - will generate for the combined entity," the organization said in a filing detailing the meeting.
Kimmelman and Consumers Union said the News Corp./DirecTV deal has commonalties with the Time Warner/Turner merger in 1996. With that deal, the FCC established a cable programming price index to evaluate whether the combined companies were raising programming costs at a more accelerated pace than historic patterns.
Consumers Union said a similar mechanism for the News Corp./DirecTV transaction "would help ensure that the alleged efficiencies of this transaction will not merely accrue to the merged entities in the form of bloated market power, resulting in bulging cable bills for consumers."
Meanwhile, FCC Media Bureau Chief Ken Ferree said the commission should complete its review of News Corp.'s takeover of Hughes and DirecTV by the end of the year. Speaking at a conference held by Charles Schwab, Ferree said re-start of the agency's informal 180-day clock for review of the deal should begin within a week.
