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DirecTV takeover faces Justice Department block

NEW YORK - The planned takeover of the US's biggest satellite TV provider DirecTV by its smaller rival EchoStar looks set to be scuppered, as reports emerge that the US Department of Justice will block the deal.

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EchoStar had been pinning its hopes on a series of concessions it had offered -- such as selling enough transmission capacity to allow another satellite operator to start up -- to win the department's approval.

The news comes just weeks after the Federal Communications Commission, the other agency investigating the proposals, rejected the deal on the grounds that it was not in the public interest.

At the time, FCC chairman Michael Powell said: "The commission can not find that this merger is in the public interest. The combination of EchoStar and DirecTV would have us replace a vibrant competitive market with a regulated monopoly."

The Justice Department's official decision is expected in the next few days, following concessions offered by EchoStar, which were submitted on Monday.

A merger between EchoStar and Hughes-owned DirecTV, which is ultimately part of General Motors, would have served 18.2m subscribers, more than 95% of the US satellite TV market.

Rupert Murdoch will be expected to restart talks with General Motors about merging DirecTV into News Corporation's satellite TV operations, which also include BSkyB.

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