The FCC has blocked Echostar’s planned $18 billion purchase of DirectTV on competition grounds. The rejection of the deal is a huge boost to Rupert Murdoch’s News Corporation, which lost out to Echostar in the auction for DirectTV last year.
The FCC said: the companies have not demonstrated that approval of the transaction will serve the public interest, convenience, and necessity.
The Commission has given EchoStar and DirecTV thirty days to modify their plans to avoid anti-competition problems.
If the Echostar-DirecTV merger had been allowed to go ahead, it would have created a company with a subscriber base of 18 million, and 90% of the US satellite broadcasting market.
News Corporation may now launch a new bid for DirectTV. The Rupert Murdoch owned company had planned to pool its worldwide satellite interests into separately listed company, Sky Global Networks, if it had won the auction for DirectTV last year.
However, General Motors could still thwart Murdoch’s plans by choosing to hold on to DirecTV until valuations improve.