Time Warner Cable Split Clears FCC Hurdle

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The Federal Communications Commission has approved the split-off of Time Warner Cable from parent Time Warner Inc., removing yet another hurdle for a full separation, which is expected by the end of the first quarter.

The FCC approved the transfer of certain licenses from Time Warner Inc. to Time Warner Cable on Wednesday. With the approval of the FCC, Time Warner only needs a favorable ruling from the Internal Revenue Service to complete the deal.

"We are pleased the commission under acting Commissioner Copps' leadership has today approved our plans to separate Time Warner Cable from Time Warner," Time Warner Inc. said in a statement. "The separation clearly is in the public interest and provides significant benefit to consumers by enabling each company to focus on its core businesses - content creation and distribution at Time Warner and telecommunications services at Time Warner Cable. The separation process is on track and we expect to finish it by the end of the current quarter."
Time Warner proposed splitting off its 85% interest in the cable unit in May. As part of the separation, Time Warner Cable had agreed to pay Time Warner Inc. a one-time cash dividend of about $9.25 billion, or $10.27 per share.
In a research note, Sanford Bernstein cable and satellite analyst Craig Moffett wrote that a deal could come as soon as a few weeks.
"At the very least, the announcement essentially removes the last remaining doubt that the separation - and payment of the attendant special dividend- will be completed before the end of the quarter, and the expiry of the existing separation agreement," Moffett wrote.

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