A miserably kept rumor since September, it looks like Rupert Murdoch is going to be trading his 38% stake in DirecTV to Liberty Media for their 19% stake in News Corporation. Since last year, Murdoch has been dropping hints about a billion-dollar broadband play. The assumption was they'd use the DirecTV brand to create a nationwide WiMAX network, possibly after merging with Echostar. Obviously throwing up a WiMAX network isn't like pitching a tent, and Murdoch found plenty of obstacles in his quest to break into the coordinated duopoly that is the American broadband industry. FCC chief Kevin Martin hinted that he wouldn't approve a DirecTV-Echostar merger, despite the fact he's never met a massive telco merger he didn't like. Then DirecTV and Echostar were effectively bullied out of the recent FCC AWS (advanced wireless services) spectrum auction. Once it was clear Murdoch couldn't turn DirecTV into a broadband and content powerhouse, he threw up his hands, called the entire company a "turd bird" (really), then began speeding up the transfer to Liberty Media. Executives may just have to face the fact DirecTV isn't destined to break into the broadband business, especially if you consider they've failed at offering satellite via broadband, failed at offering DSL, and couldn't scrap together the spectrum necessary to launch a WiMAX network. Liberty execs say that once they control DirecTV they'll explore broadband possibilities via companies they own, such as WildBlue Communications. WildBlue is simply another high-latency satellite broadband provider however, so it's unclear what exactly Liberty plans to do differently.
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