Tales of the Sausage Factory

Comcast/TW/Adelphia Deal In Trouble — Update

Back in December 2005, I wrote this piece suggesting that it might not be smooth sailing for the proposed deal between Comcast and Time Warner to split the bankrupt Adelphia systems between them and achieve total cable dominance. At the time, I was a lone voice suggesting that the split at the FCC might force the companies to chose between accepting conditions or walking away, especially as Adelphia creditors demand that the parties close the deal and come up with the money.

Apparently according to this article in Variety, I am no longer a lone nut or in denial. The endless delay and the likelihood that the FCC will impose conditions (despite the party-line green light the Federal Trade Commission gave at the end of January) has a number of analysts suggesting the deal may crumble in the face of creditor concerns and possible “deal breaker” conditions on access to regional sports networks and net neutrality.

Meanwhile, Robert McDowell’s nomination as fifth FCC Commissioner, on whom Time Warner and Comcast pin their hopes to break the tie and prevent real coditions on the merger, remains stuck in the Senate. McDowell is non-controversial, but scheduling a vote remains hostage to the vagaries of Senate politics. Senators can place a hold on any nominee for any reason. McDowell has been caught up in various controversies and thus remains in limbo. Given the short legislative calendar this session, because folks want to rush back home and campaign, it is possible that McDowell will remain in limbo until the fall. Or he may get cleared by a Senate vote when they come back this week.

If you were an Adelphia creditor, would you want to bet on the timing? Or would you rather see the deal close? And that gets you fighting with TW and Comcast.

Hmmmm….. maybe the other bids weren’t so bad after all. Anything would clear more easily than this mess. And wouldn’t it be nice to get paid?

Stay tuned . . . .

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Tales of the Sausage Factory

Adelphia Transaction Advances

Lost in the hub-bub of yesterday, the Federal Trade Commission voted 3-2 along party lines to approve the proposed division of Adelphia between Comcast and Time Warner and accompanying system swaps. What surprises me is not so much the result (getting conditions in this administration, particularly on a cable merger, was always a long-shot) but the timing. The FCC is still chewing over the data request it made in December, and the Adelphia Bankruptcy proceeding has been rescheduled for mid-March. It smacks annoyingly of a political favor done for a stalwart Republican (did we mention Brian Roberts, CEO of Comcast, is a big Bush supporter and fundraiser?) than the careful reasoning of the anti-trust agency charged with protecting the public. But that’s probably just my imagination post-State of the Union grumpiness combined with discovering how many big companies are spying on us for the government.

My analysis below . . .

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