Sky America: Cards on the table

On May 8th, Rupert Murdoch, The News Corporation Chairman and CEO, testified before the U.S. Committee on the Judiciary entitled “Direct Broadcast Satellite Service in the Multichannel Video Distribution Market.” Murdoch argued for the competitive and consumer benefits that would result if the regulators approved the merger of British Sky Broadcasting and DirecTV.

Murdoch showed his cards right away: “…we believe that this acquisition has the potential to profoundly change the multichannel video marketplace in the United States to the ultimate benefit of all pay-TV customers, whether they are direct-to-home satellite or cable subscribers."

Murdoch committed to increasing the amount of local into local services, which has always been a very high profile issue with the big DBS operators: “News Corp. is committed to dramatically increasing DIRECTV’s present local-into-local commitment of 100 DMAs by providing local-into-local service in as many of the 210 DMAs as possible, and to do so as soon as economically and technologically feasible.”

In order to allay fears of antitrust regulation and indeed fears of a new monopoly on multichannel DBS in the U.S., Murdoch drove home the point that “to eliminate any possible concerns over the competitive effects of vertical integration, the parties have agreed as a matter of contract to significant program access commitments, and have asked the FCC to make those commitments an enforceable condition of the transfer of Hughes’ DBS license.”

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