DirecTV takes fight with News Corp. to the FCC

Oct. 27, 2011 2:20 PM PT

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Satellite broadcaster DirecTV has taken its fight with News Corp. to the federal government.

The two sides are at odds over a new distribution agreement that would keep News Corp.-owned cable channels including FX on DirecTV. If an agreement is not reached by Nov. 1, DirecTV has said it will stop carrying the channels.

In a letter to the Federal Communications Commission, DirecTV took issue with some of the advertisements News Corp.’s Fox has run to alert people to the dispute. Specifically, DirecTV accused the company of misleading consumers.

‘Fox is clearly abusing the public trust by its deliberate attempt to confuse and alarm consumers,’ DirecTV Executive Vice President Derek Chang said to the FCC.

Chang said that although the contract dispute concerns FX, 19 regional sports networks (including Fox Sports West and Prime Ticket here in Los Angeles) and a handful of smaller channels (but not Fox News), News Corp. is leading people to think that its Fox broadcast network would also be dropped next week.

‘Fox is using misleading advertising informing DirecTV customers that ‘soon, in some markets, you may lose your local Fox station,’” Chang wrote to the FCC. ‘Even if the Fox cable channels are no longer carried on Nov. 1, the broadcast stations are covered under a separate agreement, which does not expire until Dec. 31,’ Chang’s letter said.

Chang went on to criticize News Corp. and its Fox unit for demanding a huge increase for the cable channels and accused them of being unwilling to negotiate a new deal for the broadcast stations even though that deal is also nearing expiration. The implication was that Fox won’t talk about a new contract for its local TV stations until DirecTV comes around on an accord for the cable networks.

Although feuds between programmers and distributors are becoming commonplace in the media industry, this one has turned nasty fast. DirecTV first alerted consumers it is prepared to drop the channels last week, the day before News Corp.’s annual meeting with investors. In its letter to the FCC, DirecTV even questions whether News Corp. is fit to hold broadcast licenses, given its treatment of the satellite broadcaster.

‘Such conduct is certainly not what the commission had in mind when it made Fox a steward of the nation’s airwaves entrusted to serve the public interest,’ the letter said.

What makes this scrape even more interesting is that News Corp. President Chase Carey used to run DirecTV for many years.

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-- Joe Flint

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