News Corp-DirecTV deal is a wrap

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The Federal Communications Commission approved News Corp's bid to acquire 34 per cent of Hughes Electronics, the General Motors subsidiary that controls DirecTV. The deal, which has been under investigation for 18 months, also won clearance from the Justice Department.

News Corp, the media group led by Rupert Murdoch, will seek annual savings and increased operating profits of $610 million-$765 million from DirecTV, the US satellite-TV platform. Of the forecast savings, News Corp has identified $65 million to $135 million in annual operating efficiency.

Murdoch, who will become Hughes Chairman, was reported as saying: "Combining Hughes' exceptional knowledge and history of satellite innovation with News Corporation's and Fox's creative talents and record of success in satellite television will result in a company with unmatched entertainment and technological offerings."

The company, which hopes to complete the $6.6 billion acquisition within days, is planning an overhaul in areas including DirecTV's customer call centres, administration and installation operations.

The FCC approval comes with conditions, including ensuring competitors access to News Corp-controlled programming. "Cable and satellite customers will continue to have access to programming from a diverse source of media outlets," said FCC Chairman Michael Powell. "With these conditions, I believe the transaction serves the public interest."

"News Corporation has a history of taking significant risks and introducing new and innovative media services," Powell said. "Enhanced competition will increase pressure to improve service and lower prices for both cable and satellite television subscribers. This is a particularly compelling public interest benefit in light of continued cable rate hikes."

The only opposition to the deal came from the commission's two Democratic commissioners, Michael Copps and Jonathan Adelstein, who voted against the deal. "News Corp. could be in a position to raise programming prices for consumers, harm competition in video programming and distribution markets nationwide, and decrease the diversity of media voices." Adelstein said.