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Hollings could cramp Murdoch’s style

Jun 18, 2001  •  Post A Comment

If history is any guide, media mogul Rupert Murdoch may be in for some rough regulatory treatment now that Sen. Ernest Hollings,
D-S.C., is the new cop on the communications beat.
Back in 1987, at the behest of Sen. Edward Kennedy, D-Mass., Sen. Hollings successfully amended an appropriations bill with a rider designed to block Mr. Murdoch from receiving a waiver of the newspaper-broadcast cross-ownership rules.
The lawmakers were attempting to prevent the News Corp. chairman from inheriting a Boston television station as part of his acquisition of Metromedia and thereby own a TV station and a newspaper, the Boston Herald, in the same market.
The Federal Communications Commission had granted Murdoch a temporary waiver of the rules for Boston but declined to extend it after the amendment was enacted.
Mr. Murdoch viewed the rider as political retribution for the Herald’s scathing criticisms of Sen. Kennedy. Eventually, the U.S. Court of Appeals in Washington ruled in favor of the media executive on the waiver issue, allowing him to keep both properties. He no longer owns the Herald.
According to “Murdoch: The Making of a Media Empire,” a book by William Shawcross, Sen. Hollings wrote an op-ed piece back then for The New York Times in which he complained of an “unholy alliance” between Mr. Murdoch and the Federal Communications Commission.
“The FCC and Mr. Murdoch need to be reminded of three important principles of our democracy,” Sen. Hollings wrote. “The airwaves belong to the public. Concentration of media ownership threatens free speech. No man is above the law.”
Sen. Hollings’ staffers dodged repeated requests last week for comment on where their boss, the new chairman of the Senate Commerce Committee, stands on a possible union of Mr. Murdoch’s News Corp. and DirecTV or of EchoStar and
DirecTV.
Andrew Davis, communications director for the senator, did note that his boss has long opposed all forms of media consolidation.
“The major thrust of his concern is that we’re going to drown out the multitude of [media] voices,” he said.
Another source insisted that despite the animosity 14 years ago, Sen. Hollings and Mr. Murdoch have a positive working relationship.
Sen. Hollings admires the fact that Mr. Murdoch took on the entrenched networks, the source said, adding, “They have developed a nice cordial friendship.”
Rep. Ed Markey of Massachusetts, ranking Democrat on the House subcommittee on telecommunications and the Internet, worries that either deal would have “a pretty high bar” to jump to show it’s not anti-competitive and won’t raise rates, an aide explained.
That’s because a DirecTV-EchoStar marriage would combine the two biggest direct broadcast satellite companies in the United States, essentially creating a DBS monopoly. That could mean higher dish TV prices, fewer choices for consumers and less negotiating leverage for equipment manufacturers.
A News Corp.-DirecTV union would leave EchoStar as a competitor, but the new company would control content and could potentially withhold affiliated cable programming from EchoStar while cutting exclusive deals with cable systems.