WASHINGTON (AP) – News Corp. won federal approval to take over the satellite television provider DirecTV, a move that federal regulators say will mean more competition but opponents contend will speed media consolidation.

The Republican-controlled Federal Communications Commission voted along party lines, 3-2, to approve the $6.6 billion deal. Following the FCC’s action, announced Friday, the Justice Department said it would not oppose the takeover of the nation’s largest satellite TV provider by News Corp., headed by Rupert Murdoch.

“News Corporation has a history of taking significant risks and introducing new and innovative media services,” FCC Chairman Michael Powell said. “Enhanced competition will increase pressure to improve service and lower prices for both cable and satellite television subscribers.”

One of the two Democrats on the commission, Michael Copps, said the deal would reduce competition, not enhance it.

“Where is the logic – where is the public interest benefit – of giving more and more media power to fewer and fewer players?” he said.

The FCC approval carries with it some conditions.

News Corp. must agree to arbitration to solve disputes with companies that carry its broadcast and cable channels, such as cable companies and other satellite providers. It also must treat all stations equally, not tilt in favor of its Fox broadcasting network and cable channels such as FX.

The arbitration was to alleviate concerns that Fox would take its network programming, which includes major league baseball and football, off cable systems to encourage viewers to subscribe to DirecTV. News Corp. agreed not to pull either the network programming or its regional sports networks while a dispute was being arbitrated.

Democratic commissioner Jonathan Adelstein said he dissented because there was one condition that was not imposed: requiring DirecTV to provide local channels via satellite to all 210 television markets, especially those in rural areas where over-the-air TV is unavailable.

“We hear a lot of talk about localism,” Adelstein said. “Here, we had the opportunity to do something about it. Instead, we let News Corp. gain all the benefits of this merger while asking them to do nothing in return for rural America, or anyone else for that matter.”

Under the deal announced in April, News Corp. would acquire 34 percent of DirecTV parent Hughes Electronics, a subsidiary of General Motors Corp. The deal would give News Corp. the largest block of shares in Hughes and controlling interest in DirecTV, which has more than 11 million subscribers.

“DirecTV is already a leader in satellite television; we want to make it such a compelling service for viewers that it becomes the logical first choice of all consumers looking for America’s best pay TV,” said Murdoch, News Corp. chairman, and former co-chief operating officer Chase Carey.

Some consumer groups opposed the deal, saying it would drive up the price of cable and satellite services and further reduce competition by shrinking the number of media companies.

“Given Rupert Murdoch’s Fox Corporation’s already bloated holdings in over-the-air TV and cable programming, the FCC should have rejected this deal,” said Jeff Chester, executive director of the Center for Digital Democracy, a media watchdog group.

On the Net:

FCC’s News Corp.-DirectTV site: http://www.fcc.gov/transaction/news-directv.html

AP-ES-12-20-03 0435EST

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