Comcast Corp. and Time Warner Cable have until Dec. 19 to answer a batch of detailed questions from the Federal Communications Commission on their proposed acquisition of Adelphia Communications Corp., the bankrupt cable operator with 5.2 million subscribers.
The FCC's 11-page questionnaire requests new and extensive company information about the merger, covering such topics as regional-system consolidation, sports-programming contracts, carriage of unaffiliated programmers and potential evasion of program-access rules.
Many of the questions were broad and involve disclosure of competitively sensitive information, including programming contracts between the MSOs and Fox News Channel, Cable News Network, TV One and eight other networks.
"We will work to respond expeditiously to the FCC so the commission will be fully informed about the benefits of these transactions, including the widespread deployment of competitive services, and it can complete its review in a timely manner," Comcast spokesman Tim Fitzpatrick said.
The FCC's informal 180-day merger-review period expired last week. The MSOs have said they expect the deal to close before July 2006. The Federal Trade Commission is reviewing the deal for antitrust problems.
Some have argued that the $17.6 billion Adelphia deal will leave Comcast and Time Warner with excessive power over new and established programmers and the ability to punish Internet-based voice and video providers that represent competitive threats.
In that regard, the FCC asked if programming distribution over national fiber networks could allow Comcast and Time Warner to evade rules that ensure that satellite-TV companies have access to program networks owned by cable companies.
One of the most vocal opponents of the merger, a start-up programmer called The America Channel, has complained that without a carriage deal with Comcast, it won't be able to gain a toehold in the market.
The FCC asked Comcast and Time Warner to explain why they have reached carriage deals with affiliated networks but provide unaffiliated channels like TAC with so-called hunting licenses, which permit networks to seek distribution from regional and local managers.
"There is no question that the acquiring parties employ disparate standards with respect to carriage decisions of affiliated and independent channels. We plan to continue to shed light on this market dysfunction, which plays out to the detriment of consumers and the industry," TAC CEO Doron Gorshein said.