FCC Approves Adelphia/Time Warner/Comcast Deal With Conditions

On July 13, the FCC approved the sale of substantially all of the cable systems and assets of Adelphia Communications Corporation (“Adelphia”) to Time Warner Inc. (“Time Warner”) and Comcast Corporation (“Comcast”), the exchange of certain cable systems and assets between affiliates or subsidiaries of Time Warner and Comcast, and the redemption of Comcast's interests in Time Warner Cable and Time Warner Entertainment Company.
In reaching its decision, the FCC found that the transactions, as conditioned, serve the public interest and comply with all applicable statutes and Commission rules. The Commission also found that the potential public interest harms of the transactions, as conditioned, are outweighed by the potential public interest benefits. With respect to benefits, the Commission determined that subscribers would benefit from the resolution of the Adelphia bankruptcy proceeding in the form of new investment and upgrades to the network.

Additionally, the transactions would accelerate deployment of VoIP and other advanced video services, such as local VOD programming, to subscribers. With respect to the potential harms, the Commission found that the proposed transactions may increase the likelihood of harm in markets in which Time Warner or Comcast has, or may in the future have, an ownership interest in Regional Sports Networks (“RSNs”). The Commission imposed remedial conditions, the same as those imposed in the News Corp.-Hughes order to address its concerns.

The Commission adopted further conditions to ensure that the transactions will not harm the supply of programming to multichannel video programming distributors. Specifically, the Commission adopted a condition allowing unaffiliated RSNs unable to reach a carriage agreement with Time Warner or Comcast to seek commercial arbitration. In addition, the Commission adopted a condition allowing unaffiliated programmers unable to reach a leased access agreement with Time Warner or Comcast to seek commercial arbitration.

For more information contact:

Olev Jaakson at ojaakson@dbmlawgroup.com.