Adelphia Deal Opposition Grows as Pay TV Group Seeks Conditions
Opposition to the proposed takeover of Adelphia cable systems has increased with the formation by pay TV firms and media activists of a group seeking FCC and FTC curbs on the deal. Members of the consortium include DirecTV, EchoStar and RCN, which have previously expressed concern to the FCC about the potential to snuff out competition in the market for programming for local networks. The companies want the FCC to impose a wide array of restrictions on Comcast and Time Warner, seeking Commission approval for the $17.6 billion deal. They want to ensure the 2 largest U.S. cable operators don’t limit the availability of programming.
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There’s also disagreement over whether FTC staff is poised to recommend approval of the deal. Although representatives of some of the firms have told FCC officials an FTC okay is near, one media activist said that’s not so. FTC staff are asking the 5-member commission to decide against suing to block the deal, said a person familiar with the situation who asked not to be identified. The takeover of cable systems with nearly 5 million customers should get the FTC nod “fairly soon,” said a source.
But that’s not what activist Andrew Schwartzman said he’s been told. “The parties are acting as if this is all a done deal at the Federal Trade Commission. That’s certainly what they told the FCC people,” said Schwartzman. “Our impression is that while the staff is completing its recommendations, they are several weeks off before there is any action,” said Schwartzman, CEO of Media Access Project. His firm is among the members of the Competition & Diversity Coalition on the Adelphia Transaction (CADCAT). The group is expected to unveil its formation late Tues. or early Wed.
Officials from at least one of the 3 firms recently told FCC officials the deal won’t face FTC hurdles, said a source. Time Warner and Comcast declined comment. Adelphia expects the takeover to be done by July 1. It said in a statement to us that the firm is “making our best effort at achieving a close by the end of the first quarter.” Completion after April 21 would be a delay from the 3 firms’ original timeline (CD April 21 p1).
FTC officials studying the deal declined to discuss their review, citing confidentiality curbs. It’s unclear if staff will urge conditions, said sources. The FTC looked closely at potential to diminish competition for RSNs and other local programming (CD Aug 19 p1). CADCAT, homing in on that, will seek an FCC meeting to get more information, said Schwartzman. Members haven’t decided if they'll request a FTC meeting “as a group or individually,” said Schwartzman.
MASN belongs to CADCAT. The RSN has been deadlocked with Comcast over the cable operator’s refusal to carry Washington Nationals games from the network. Center for Creative Voices in Media and The America Channel (TAC) also are in the group. TAC, which hasn’t begun programming, has been unable to get carriage on cable systems owned by the 3 firms in the deal. Verizon’s FiOS fiber TV service will carry the channel, to air original shows on Americans’ accomplishments.
The Comcast/Time Warner plan to expand clusters of cable subscribers is being used by CADCAT to argue for conditions. Comcast’s market share would rise in D.C. and other areas, while Time Warner Cable would cement a hold in the L.A. area. The firms have said the deal will benefit the public because they'll offer Adelphia customers broadband, VoIP and other advanced services. The FTC likely will okay the deal, since it would ensure a bankrupt company keeps operating, according to law professors not involved in the case.
A positive FTC staff recommendation won’t keep members of the FTC from seeking curbs, said a media activist not involved with those seeking limits. “Just because the staff recognizes it, it doesn’t mean that’s the final deal,” said Jeff Chester, exec. dir.-Center for Digital Democracy. Internet neutrality and rules guarding against biased program access both deserve special heed, said Chester: “Commissioners can still seek safeguards or revisions if they can secure enough votes on the commission.”