FTC Eyeing Adelphia Deal’s Local Program Impact, Sources Say
The FTC is examining how Adelphia’s takeover might affect competition for regional programming, sources said. The FTC has asked parties that may be affected by the $17.6 billion deal if it would reduce local competition, sources told us. A local issue apparently under FTC scrutiny is the deal’s impact on regional sports networks (RSNs). The FTC has asked some firms to comment on the issue, sources said.
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The FTC is asking about the potential for Comcast and Time Warner to withhold local programming if those firms use their market clout to sign exclusive distribution deals with programmers. The companies have said taking over Adelphia will improve their efficiency at selling newer cable services by boosting their presence in markets including Washington, W. Palm Beach, Fla., and L.A. (CD April 22 p2). In the L.A. area, Time Warner will have a majority market share.
Pay-TV rivals and municipalities fear the transaction will stifle regional competition for TV shows (CD July 25 p6). DirecTV has warned of “regional monopolies” where anti-competitive behavior is likely. It asked the FCC to impose conditions barring exclusive carriage accords between RSNs affiliated with Comcast and Time Warner and those cable operators.
FTC review hasn’t focused on the national video market, sources said, citing communications with the agency. Lack of concern about nationwide dominance may stem from the fact that neither Comcast nor TW will have a market share of more than 30%.
House Judiciary Committee Chmn. Sensenbrenner (R-Wis.) asked FTC Chmn. Deborah Majoras to probe “increasing concentration in the cable TV segment… and its impact on programming diversity.” Separately, Rep. Watson (D-Cal.) urged Judiciary Committee hearings to “investigate the potential anti-trust implications” of the Adelphia acquisition (CD Aug 8 p5).
Adelphia and Comcast officials declined to comment. FTC officials declined to comment because the review is still underway. The agency has said it would conduct a “complete evaluation of the potential competitive effects” that shows any trend toward increasing industry concentration. Time Warner declined to comment directly on the FTC review, but a spokeswoman said “we believe this transaction will benefit consumers in Adelphia’s service areas.”