Wondering When FCC Will Act

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Washington— 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 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 meetings with Martin aides and FCC Media Bureau staff.

Another possibility is that the agency is waiting out Comcast and Time Warner to volunteer a la carte proposals acceptable to Martin. The merger is supposed to close by July 31.

“The commission is hard at work on the merger,” an FCC official said last week.

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 on Jan. 31, 2006, 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 last Thursday.

The Adelphia merger arrived at the FCC with the agency divided 2-2 between Republicans and Democrats, which could explain the delay. But political deadlock at the FCC can’t be an excuse anymore, because Republican Robert McDowell was sworn in June 1, giving Martin a partisan majority.

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

In recent weeks, Martin’s a la carte advocacy has changed. Before, he tended to describe a la carte as an option, along with indecency regulation of basic-cable networks and creation of family tiers. Now, he’s an unalloyed a la carte booster.

Still, sources close to the Adelphia merger said that in their talks with FCC officials a la carte has not come up as a merger condition.

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 subscribers won’t buy a family tier without the popular sports network.

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

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