Comcast to take over
Adelphia
By Alex Kraus
The Comcast Corp. overcame another obstacle in the path toward becoming
Lexington’s new cable operator, although it is too early to determine
how the change will affect local customers.
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On Jan. 31, the Federal Trade Commission approved Comcast's and Time
Warner’s joint buyout of the bankrupt Adelphia Communications for $17.6
billion. That approval ended the FTC’s seven-month investigation into
the deal, in which the Republican-majority commission concluded that the
deal is unlikely to substantially lessen cable competition in the United
Sates.
Adelphia is now Lexington's cable franchise, which makes it the city's only cable television provider. Lexington City Manager Jon Ellestad said that Lexington received official notice from Comcast in December that the company plans to take over Adelphia’s service in the area.
“After we got their assurance that they would accept our franchise terms
with Adelphia, we approved the request. We didn’t put up any opposition
with their taking over,” he said. “They’re going to be the largest cable
provider, so they’re quite capable of operating a franchise.”
Comcast still has challenges ahead before the deal is final. The Federal
Communications Commission must now ensure that the deal is good for
consumers. Comcast, already the largest cable company in the nation with
21.4 million subscribers, will receive an additional 3.9 million
subscribers from Adelphia.
One of the seats in the five-member FCC is currently vacant, which means
that the buyout will have a harder time passing the split-party FCC than
it did the Republican-majority FTC. Analysts predict that the deal will
only pass the FCC only after the commission attaches some conditions.
Multichannel News, a television industry journal, predicts that two
conditions are likely to be attached to the deal.
The first proposed condition is being lobbied by satellite television
providers, namely Dish Network and DirecTV. These satellite providers
want access to Comcast’s exclusive regional sports packages, and they
want the FCC to help negotiate fair pricing of the packages if they
become available for licensing.
The second condition concerns cable-provided
Internet access. Consumer groups want to prevent Internet providers like
Comcast from charging large Web sites for a faster transmission of their
content to customers. Consumer groups, advocating what they call "net
neutrality," fear that this will lead to a hierarchy of Web sites that
will be unfair to smaller sites.
Jim Gordon, vice president of public
relations for Comcast’s Atlantic region, declined to speculate on any
possible conditions that the FCC might attach. But Gordon did say that
this was the first time that Comcast has acquired bankrupt assets. The
deal is still pending the outcome of several of Adelphia’s bankruptcy
court cases.
Gordon said the company does not have a
projected date for completion of the purchase. He declined discussing
the specifics of the deal until it is finalized.
Ellestad said that Lexington residents
probably won’t notice much of a change during the transfer.
“It’s just a different company that will
provide service. They have to abide by the same franchise. The local
regulations are going to be the same whether it’s Adelphia or Comcast.
The most difference is going to fall upon whether or not Comcast is
better than Adelphia was,” he said.
Gordon was optimistic that Comcast will be
attentive to the needs of its local service areas.
“We’ve been through this so many times; one thing that is a hallmark of our company is being a locally-run business. Folks can see that in the many franchises we run. We are a nationally-run company, run primarily on the local level,” he said.
Produced by Washington and Lee journalism students.
Lead supervisor: Prof. Claudette Artwick
Reporting supervisor: Prof. Doug Cumming
Editing supervisor: Prof. Pamela Luecke
Technical supervisor: Michael Todd