FCC Grants MCI Direct Satellite License

The government cleared the way Friday for MCI Communications Corp. to beam satellite TV directly into homes, despite protests from rival cable companies concerned that the right could soon belong to a foreign company.

The Federal Communications Commission approved a license for MCI to provide nationwide direct broadcast satellite even though the telephone giant has announced plans to merge with London-based British Telecommunications.

The license is the last available allowing a provider of DBS service to beam TV programs coast to coast for reception over a pizza-sized dish.

The FCC said the license was “entirely separate and distinct” from the decisions it later will make concerning the merger itself.

Echostar DBS Corp., DirecTV Inc., cable TV giant Time Warner Inc. and other competitors had objected to the $682.5-million license for MCI because it could lead to foreign ownership of the rights.

But the regulatory agency said foreign ownership complications would be considered next year when it decides whether to approve MCI’s proposed merger with British Telecom.

“Our action today does not in any way prejudge whether or not the commission should eventually approve MCI’s application to transfer control of its DBS authorization and other authorization licenses to British Telecom,” FCC international bureau chief Don Gips said.

MCI said the cable companies’ claims were just an effort to stop competition and praised the FCC’s decision as a “win for competition, a win for American taxpayers and a holiday present for consumers.”

MCI shares fell 50 cents to close at $31.50 on Nasdaq.

The Clinton administration has suggested that it may weigh in later on the MCI-British Telecom merger to address foreign policy, trade, investment and national security issues.

The agency also approved Echostar’s $52.3-million license to provide service to the Western United States. The two companies won the last remaining DBS licenses at an auction in January.