ROANOKE TIMES 
                      Copyright (c) 1997, Roanoke Times

DATE: Saturday, April 19, 1997               TAG: 9704210124
SECTION: BUSINESS                 PAGE: A-8  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS 

MCI, MURDOCH KEEP RIGHTS TO DIRECT-BROADCAST SATELLITE FCC HAD REVOKED LICENSE FROM COMPANY THAT FAILED TO ACT

A $682.5 million bid had won the last remaining national license to provide DBS service in the United States.

MCI Communications Corp. and Rupert Murdoch's News Corp.'s plan to provide TV and other services directly into homes via high-powered satellites has withstood a legal test.

The U.S. Court of Appeals for the District of Columbia on Friday upheld a 1995 Federal Communications Commission decision to take the license from Advanced Communications Corp. and put it up for auction.

The FCC held the auction last year. MCI, with a $682.5 million bid, won the last remaining national license to provide direct-broadcast satellite, or DBS service, in the United States. MCI and News Corp. are partners in a DBS business.

The FCC took the license because Advanced Communications failed to meet the FCC's timetable for building a satellite system.

It is the second time the court rejected challenges to the FCC's handling of the last DBS license. The first time was in May 1996.

``It's vindication for us,'' said FCC Chairman Reed Hundt. ``We win again on our competition policy,''

In its ruling Friday, the court said, ``We hold that the commission's decision to assign DBS channels by auction is not retroactive, arbitrary and capricious or without statutory authority.''

That was the claim made by DirecTV Inc., Directsat Corp. and EchoStar Satellite Corp., all of which are now in the DBS business. EchoStar, which holds a DBS license of its own, is now involved in a DBS business with Murdoch.

If the FCC had lost, the DBS license held by MCI and Murdoch would have been revoked and reauctioned with DirecTV, the nation's largest DBS company, and others being allowed to bid, an FCC attorney said.

DirecTV and Directsat Corp. did not participate in the auction that MCI ended up winning. EchoStar did.

Petitioners could ask the entire D.C. Circuit or the Supreme Court to review the case.

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