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from: Washington Post

FCC poised to approve Adelphia sale to rivals

By Jeremy Pelofsky
Reuters
Thursday, July 13, 2006; 2:09 AM

WASHINGTON (Reuters) - The U.S. Federal Communications Commission is set on Thursday to approve the sale of bankrupt Adelphia Communications Corp. to rival cable operators Comcast Corp. and Time Warner Inc. despite objections from consumer advocates.

The five commissioners will vote on FCC Chairman Kevin Martin's recommendation to approve the $17.6 billion transaction with a few conditions. The FCC open meeting begins at 9:30 a.m. EDT (1330 GMT).

The agency is expected to bar the two cable providers from striking exclusive contracts for regional sports programming in all U.S. markets except Philadelphia, where Comcast is the owner of the regional sports network, sources close to the matter said.

Competitors would also be able to seek binding arbitration if they were unable to get a deal for that programming from the two cable providers, similar to a condition attached to News Corp.'s purchase of DirecTV Group Inc. in 2003, they said, declining further identification.

However, the FCC is not expected to back a condition ordering the companies to adhere to its principles on Internet access, known as Net neutrality, unlike a requirement imposed on two major communications deals in 2005, the sources said.

The companies have argued the deal would benefit consumers by allowing them to upgrade the Adelphia cable systems that have languished while it has been mired in bankruptcy for four years. Adelphia has more than 5 million customers and is the nation's fifth largest cable operator.

Consumer advocates have countered that the sale would concentrate more power in the two biggest U.S. cable operators, leading to higher prices.

As part of the deal Comcast and Time Warner plan to swap cable properties in several cities, enabling them to create bigger clusters of operations in the hopes that it will produce additional cost savings.

Time Warner will get customers in cities like Los Angeles and Dallas from Comcast in exchange for customers in places like Memphis and Minneapolis.

Satellite television providers like DirecTV have been pressing for the FCC to crack down on the pricing for popular regional cable sports networks and force Comcast to make available its programming in Philadelphia.

Comcast has not been required to offer its content there because it distributes it via ground systems. U.S. regulations only force programming to be made available to competitors when it is sent over satellites.

In that city, Comcast is also the majority owner of the National Hockey League's Philadelphia Flyers hockey team and National Basketball Association's Philadelphia 76ers.

FCC commissioners were still debating late Wednesday whether to step into the fight to get Comcast to carry the channel that airs the Washington Nationals baseball team, one source said. Lawmakers had pressed the agency to act.

The FCC also was discussing what to do, if anything, about complaints regarding an exclusive deal in which Comcast offers some PBS children's programs via video-on-demand, the sources said.