Fox On Steroids

Editor's Note: The FCC is currently considering Rupert Murdoch's plan to acquire DirecTV, the biggest satellite cable provider in the nation. Jeff Chaster tells Steven rosenfeld why this deal will spell disaster for broadcast media.

Jeff, why is the proposed transfer of DirecTV to Rupert Murdoch's News Corp. of particular concern to progressives and liberals?

This deal by Murdoch will vastly enhance his political power in the United States and around the world, to shape news and information and entertainment programming. Once he takes control over the U.S.'s most powerful and important direct broadcast satellite system, DirecTV, Murdoch will really be just one of two people in the country who can literally create a national programming channel with the snap of his fingers.

So Murdoch, it's likely, if he gets DirecTV, will be able to create a suite of Fox News channels. Imagine Fox News on steroids -- that's what we're about to get if this deal goes unopposed.

Is this deal essentially a paperwork transaction for the FCC?

Well, unless there's significant opposition from public interest groups, consumers and unions, this is a done deal under the anti-trust rules and, really, FCC policies. It's unlikely they will oppose Murdoch's taking over DirecTV, because, in a fanciful theory of theirs, they don't see Murdoch's extensive holdings in broadcast and cable and motion pictures and newspapers as being in conflict with his also owning another major distribution service, direct broadcast satellites.

In addition, Murdoch is clearly wired to the White House. Fox News is a 24-7 campaign contribution to Bush and the GOP. So there's a lot of favorable political support.

I don't think the public is aware of the serious implications of this deal. It's going to enhance the power of conservatives all across the board. Murdoch is going to be able to create not just national channels, but even local channels: A Fox News for Cleveland; a Fox News for Detroit, or Atlanta, that will increase the power that conservatives and conservative causes have over the American political system. So it's something we really should be concerned about.

Who has tried to oppose this, with filing papers before the FCC?

There are a number of industry groups actually concerned about this proposed merger, including the National Association of Broadcasters, the principle lobbying group for the broadcast industry. They're worried that Murdoch will simply bypass local Fox affiliates -- stations that are not owned by Murdoch -- and simply provide programming direct from Fox itself, weakening local stations' ability to serve the public.

Major media companies like Cox, for example, and Cablevision, and small cable systems are also concerned about the power [of Murdoch-owned media]. I mean, if you read what the industry groups are saying, they acknowledge that this is an unprecedented proposed merger, where a major broadcaster like Murdoch is given control over the key satellite service, and that, they say -- as we say -- Murdoch will become an even more powerful gatekeeper.

Since public-interest arguments often aren't as persuasive as business-interest arguments before this administration, do you think those arguments will be persuasive?

Well, I think that there is going to be some pressure to force Murdoch to come to terms with these very powerful other media lobbyists, like Cox and Cablevision. But the larger questions about restraining his ability to create all these channels, including ideologically focused channels that favor his position, are likely to be off the table in the absence of opposition.

Now unions really do need to get involved here, because in this bizarre transaction, it turns out that employee pension funds from General Motors will actually control one-fifth of the Murdoch-DirecTV entity. Yet, at the moment, the unions haven't really focused on this deal. It's likely those pension funds will take a beating, as Murdoch soaks DirecTV dry to bolster the profits of his other ventures.

Have you spoken to anyone at the AFL-CIO?

We've alerted the unions. We've alerted the institutional responsible investor organizations. We're hoping they will look at this deal closely and take the interests of shareholders and pensioners to heart.

One of your objections to this merger is that the two companies, Hughes and News Corp., will not be run independently, as they claim. Why is that a problem?

Well, Rupert Murdoch, in trying to allay fears from critics, said that he's going to have the majority of the board of the proposed company, be in the control of "independent directors": that six of the 11 directors will be independent. And hence, the public has nothing to fear from any kind of self-dealings, where DirectTV favors News Corp.-Fox programming.

Well, it turns out that there have been five so-called independent directors named, and according to our research, at least three of the five have direct financial relations with Murdoch, either presently or in the past. So this notion that there's going to be some kind of independent watchdog to protect the public interest is truly a joke.

So what's the timetable here?

Well, Murdoch hopes to complete the deal by the end of the year, and absent any opposition, he will become a global Citizen Kane more than he already is.

We have to have Congress raising concerns about this merger, and complaining about the anti-competitive effects, complaining about how it will favor conservative causes. We have to have the public speak out, like they just did against the FCC's [media ownership] rules. We need people to flood Congress with letters and faxes and e-mails saying this is a bad deal for Americans. And if Congress gets a sense that something's wrong with this deal, we might be able to derail it.

Steven Rosenfeld is a commentary editor and audio producer for TomPaine.com.

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