NEW YORK -- In a sharp reversal of its bitter campaign to thwart the expansion of the Fox television network, NBC agreed yesterday to cease its effort to deny Fox licenses for broadcast stations in seven cities.
NBC said it had reached a potentially lucrative agreement with Fox Chairman Rupert Murdoch to have two NBC-owned cable channels distributed over Murdoch's Star Television system, which delivers programs by satellite to homes in Asia.
NBC decided to end its bitter dispute with Fox because, said NBC President Robert C. Wright, "we have accomplished everything we set out to do." Mr. Wright said he thought NBC had adequately presented the merits of its case and had supplied all of the documents and information the Federal Communications Commission required.
The FCC will proceed with a decision on the complaints NBC brought, but several executives close to the dispute said Mr. Murdoch was gambling that the removal of NBC, a powerful adversary, would make it easier for the FCC to find a way to resolve the issues on a basis favorable to Fox.
"The issues aren't going to go away," a senior Fox executive said. "But with NBC no longer a protagonist, there could be some effect on the consideration being given by people in Congress, the commission and its staff."
NBC petitioned the FCC last year on the issues of foreign ownership of television stations, as well as on the number of stations that one owner is allowed to control. Fox executives strongly denied the most serious allegation, first brought by the National Association for the Advancement of Colored People, that Fox had illegally misrepresented the extent of its foreign ownership when Mr. Murdoch took control of Fox's TV stations in 1985.
The issue, already hotly debated in Washington -- especially among members of Congress with oversight over communications policy -- was further complicated by a book deal that House Speaker Newt Gingrich signed with HarperCollins, owned by Murdoch. Both men denied that the book deal represented a conflict of interest, even though Mr. Murdoch was deeply embroiled in a regulatory dispute and Mr. Gingrich has advocated sweeping regulatory relief.