Dearth of Adelphia Deal Data Has FCC, Industry Fretting
Lack of data from Comcast on its deal with Adelphia is unsettling officials in industry and at the FCC, now reviewing the $17.6 billion proposal. The main worry is lack of access to e-mails on regional sports networks, an FCC source said. A DirecTV gripe stoked that concern (CD Feb 16 p13), this person said. Media Access Project (MAP), which wants curbs on the deal, is upset at Comcast’s reluctance to allow it entree to flowcharts and other data on the number of subscribers attributed to the cable operator.
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MAP was to meet Tues. with FCC officials, including Chief Economist Leslie Marx, to air its concerns, said Harold Feld, MAP senior vp. Rebuffed by Comcast on a request for additional subscriber-related documents, MAP may ask the Commission to order Comcast to release them, Feld said. DirecTV got more access to documents on the deal by protesting, said Feld. The merging parties have made available a room where DirecTV can review confidential material 24 hours a day, he said. The Media Bureau had issued an order Feb. 8 permitting economists hired by DirecTV to review confidential Comcast and Time Warner documents at the offices of one of the merging companies’ outside counsel. MAP wants a similar deal.
DirecTV’s economists are operating under the document access conditions imposed by the Media Bureau Feb. 8, said a person familiar with the situation. Analysis of the merger’s effect on regional sports channels is hampered by the constraints, said the source. The Media Bureau asked DirecTV to give the Commission a copy of its final report on the channels and said DirecTV can keep a copy. Work in progress on the local sports networks, including charts and graphs, can’t leave the premises, the order said.
The group wants to check subscriber data to see if Comcast’s market share will exceed 30% after the purchase of Adelphia systems with Time Warner, said Feld. The Commission capped nationwide cable ownership at that level in rules since sent back for Commission reconsideration in Time Warner v. FCC. Comcast lawyers said MAP’s economist couldn’t copy files from a disc. To check calculations, Feld said, “We tried to work with Comcast for access to subscriber data, and offered to have the same conditions as DirecTV, and they refused to accommodate us… What they require is for our economist to copy the numbers by hand into his spreadsheet in order to do the necessary analysis, which is a process that takes days if not weeks of manual typing.”
Comcast produced no “substantive” e-mails on a Chicago sports network it’s forming and only 2 related to another such network, said DirecTV in a Feb. 14 ex parte filing: “Should the Commission find that responsive documents have not been produced, DirecTV submits that the ends of justice would be best served by adopting an adverse inference with respect to the subject matter(s) in question.” The company declined to comment beyond the filing. It said Time Warner’s document “production appears to be more complete, [but] there are surprising omissions there, too.”
The FCC wants to find more e-mails not yet disclosed, said the agency source. But the person said lack of documentation hasn’t slowed review. The Adelphia transaction remains on track to be completed by June 30, said a company spokesman. “We continue to expect to close in the first half of the year and we continue to work cooperatively with the Commission on its inquiry,” said a Time Warner spokeswoman. She again said the market for cable programming is already competitive. Comcast declined to comment on the companies’ concerns. “We look forward to the timely and cooperative conclusion of the review process,” said a company spokesman.
Another frequent filer in the FCC Adelphia docket said it also worries over the lack of documents. “The America Channel… noticed a lack of responsiveness in the publicly filed documents,” said company Pres. Doron Gorshein. The fledgling digital channel, upset at not getting carriage on Comcast, “is preparing its response,” Gorshein told us. The company and DirecTV are among members of a group seeking FCC conditions on the Adelphia deal to ensure that Comcast and Time Warner can’t limit programming availability (CD Jan 18 p1). The FTC had focused on whether the firms could use exclusive programming on regional sports networks to hurt rivals. That agency decided not to block the deal (CD Feb 1 p9).