FCC Still Sitting on Adelphia Deal

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Cable-industry insiders said they don’t know what it’s going to take to prod the Federal Communications Commission to act on the Adelphia Communications Corp. sale to Time Warner Inc. and Comcast Corp.

Cable-industry officials who asked not to be identified don’t think FCC chairman Kevin Martin is holding up the merger in an effort to impose a la carte conditions on Time Warner and Comcast.

“That has not come up at all,” said one cable-industry source, referring to meeting with Martin aides and FCC Media Bureau staff.

Martin’s strategy could be that instead of the FCC adopting a la carte conditions, the agency is waiting for Comcast and Time Warner to volunteer a la carte proposals acceptable to Martin. The merger is supposed to close by July 31.

Time Warner and Comcast have agreed to pay $16.9 billion for bankrupt Adelphia’s 5 million subscribers. The Federal Trade Commission approved the deal without conditions Jan. 31, but the FCC has had it under review for 370 days (as of June 9), making it one of the longest-reviewed cable deals in recent FCC history.

“Well, it has been a long time. I think it’s more than twice the amount of time taken on the other [mergers],” Senate Commerce Committee chairman Ted Stevens (R-Alaska) said Thursday.

The Adelphia merger arrived at the FCC with the agency divided 2-2 between Republicans and Democrats, which could explain the delay. Time Warner chairman and CEO Richard Parsons said he wanted the agency to postpone the Adelphia merger until a fifth commissioner arrived to give Republicans a 3-2 majority. Comcast, by contrast, said it was the FCC’s call to move the merger.

Two big telecommunications mergers -- SBC Communications Inc. and AT&T Inc., and Verizon Communications Inc. and MCI Inc. -- cleared the FCC last fall while the agency was evenly split along party lines.

Comcast chairman and CEO Brian Roberts discussed the merger with Martin during the National Show in Atlanta in April, according to FCC records. On May 30, Time Warner Cable CEO Glenn Britt called Martin asking the commission to act expeditiously on the Adelphia merger, FCC records show.

“The commission is hard at work on the merger,” an FCC official said, but the official would not discuss whether Martin wanted a la carte conditions.

Political deadlock at the FCC can’t be an excuse for delay anymore with regard to Adelphia because Republican Robert McDowell was sworn in June 1, giving Martin a partisan majority.

“They were … not a complete commission,” Stevens noted. “Now that we have all five there, I expect them to start moving forward [on Adelphia].”

One source indicated that Martin's goal was to force Time Warner and Comcast to beef up their family tiers by adding ESPN in response to concerns that cable subscribers won’t buy a family tier without that popular sports network in the package.

“That’s my sense, but I don’t know for sure,” a cable-industry source said.

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