FCC OKs Sale of Adelphia to Comcast, Time Warner

Jul 13, 2006  •  Post A Comment

The Federal Communications Commission today approved Comcast’s and Time Warner’s $17.6 billion purchase of the assets of Adelphia Communications today after imposing some of its broadest limits yet on cable companies signing exclusive deals with the regional sports networks.

On a 4-to-1 vote with only Democratic commissioner Michael Copps voting no, the commission approved the deal that will lead to Adelphia, the country’s sixth-largest cable provider, merging with two larger competitors and further concentrating the cable industry. Adelphia has been in bankruptcy since 2002, after being rocked by a corporate scandal.

With the deal and related market swaps, Time Warner will have broader presence in the Los Angeles, Dallas and Cleveland markets, while Comcast will a bigger presence in Miami, Northern Virginia, Boston, Minneapolis and Pittsburgh.

Mr. Copps warned that the negative repercussions of the deal clearly overwhelm the benefits.

“This decision is about big media getting bigger with consumers left holding the bag,” he said. “It comes with too heavy a price tag,” he said, citing the swapping of cable systems that will happen as part of the deal. “My advice to consumers is, ‘Hold on to your pocketbook.'”

Other commissioners, among them Mr. Copps’ Democratic colleague Jonathan Adelstein, supported the deal, though Mr. Adelstein had some objections.

The FCC, which delayed a scheduled commission meeting more than three hours today before finally approving the sale, imposed a number of conditions on the deal, some added at the last minute.

As it had in the News Corp. acquisition of Direct TV, the FCC barred Comcast and Time Warner from restricting their own regional sports networks to their subscribers, but this time the FCC went further, saying the companies also couldn’t refuse to carry regional sports networks they don’t own. The FCC required any differences over pricing to be arbitrated. The impact will be nationwide, but it will force Comcast to put Mid-Atlantic Sports Network’s telecasts of the Washington Nationals broadcasts on its Washington-area cable system.

The FCC also agreed to begin to look into whether cable companies are providing adequate leased access to local independent programmers.

Consumer groups warned the deal would give the companies even greater control over what channels are available to consumers nationally.

“Today [the] FCC largely rubberstamped a deal that allows two cable giants to divide and conquer the already concentrated cable market that has delivered skyrocketing cable rates to consumers,” said Mark Cooper, director of consumer research for the Consumer Federation of America.