Groups Ask FCC to Block Adelphia Sale

Public interest groups, rival satellite companies and cable programmers Thursday filed papers asking federal regulators to block or impose conditions on the acquisition of Adelphia Communications Corp. by the nation’s two largest cable TV providers.

Some critics said the deal would give the two buyers, Time Warner Inc. and Comcast Corp., monopolistic powers that could deprive competitors of programming. Others objected to how the sale would make Time Warner the dominant pay-television provider in Los Angeles, the nation’s second-largest market.

Among the dissenters that filed papers, due Thursday as part of the regulatory approval process, were DirecTV Group Inc., the National Hispanic Media Coalition and a group that includes consumer advocates such as the Center for Digital Democracy, Media Alliance and the U.S. Public Interest Research Group.

Despite their complaints, however, analysts say the Federal Communications Commission is unlikely to block the $17.6- billion deal, which was struck in April pending approval of regulators and the U.S. Bankruptcy Court. Adelphia filed for bankruptcy protection three years ago amid an accounting scandal.

The deal would make Time Warner the largest cable provider in Southern California while giving Comcast more customers in Ohio, Pennsylvania, Washington and Florida.

“We’re optimistic that all regulatory approvals will be obtained,” said Susan Duffy, a spokeswoman for Time Warner.

Federal rules preventing a single cable operator from serving more than 30% of the nation’s TV households were thrown out by the courts several years ago. Neither Time Warner nor Comcast would exceed those limits as a result of the acquisition.

Still, analysts say the FCC could impose conditions on the sale that would prevent Time Warner or Comcast from using their growing clout to secure exclusive rights to popular programming such as sports or from charging rivals unfair rates for channels either of them owns.

“This will be the biggest battlefield,” said Blair Levin, an analyst at Legg Mason in Washington.

In its filing, DirecTV urged the FCC to impose such conditions, which are similar to restrictions that were placed on its parent company, News Corp., as part of its 2003 takeover of the nation’s satellite TV leader.

The conditions prevent News Corp. from withholding its popular Fox regional sports channels from cable rivals as a way to lure subscribers to DirecTV. Time Warner and Comcast will address specific objections to the transaction in a response to the FCC that is due Aug. 5. The companies, however, have maintained that the deal would create operating efficiencies that would enable them to accelerate the deployment of digital cable, video on demand and telephone service to consumers who now subscribe to Adelphia.

The National Hispanic Media Coalition said in its filing that oversight was needed to ensure that these services were parceled out to poor neighborhoods as well as affluent ones and that channels aimed at minorities were carried.