NEWS CORP. - DIRECTV DEAL COULD LEAD TO HIGHER PRICES FOR SATELLITE AND CABLE TV

WASHINGTON, DC -- According to news reports, the board of General Motors has agreed to sell its DirecTV satellite operation to News Corp.
Gene Kimmelman, senior director of public policy and advocacy for Consumers Union, made the following statement in advance of the board's decision:

"Consumers Union fears that a News Corp. purchase of DirecTV is likely to lead to higher prices for both satellite TV and cable TV customers.

"Rather than use DirecTV to compete with cable companies and drive down prices, News Corp. can maximize its profits by raising prices for its popular TV network, news channel, and sports programming distributed by all cable and satellite companies.

"It would be far more profitable for News Corp. to maximize programming prices and ad revenue from approximately 70 million cable customers, 20 million satellite customers, and 15 million over-the-air households than to drive down the price of DirecTV and slowly grow its base of 11 million customers.

"This transaction comes at a time when the Federal Communications Commission is considering relaxing or eliminating limits on local and national television station ownership, and considering abandoning the prohibition on owning a newspaper and television broadcast station in the same community. Consumers Union believes that the News Corp./DirecTV deal illustrates the danger of allowing one company to gain excessive control over local and national media properties, and calls on the FCC to tighten rather than loosen current media ownership rules."

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Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.

View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

  
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