Lack of FCC Data Request on Adelphia Slows Approval, Sources Say
FCC slowness in sending an information request to the 2 firms buying Adelphia cable systems is among the hold- ups on the $17.6 billion deal, said sources familiar with the regulatory inquiry. The information request, which, under the agency’s informal timetable, normally would have been made almost 3 months ago, is in draft, said people familiar with the situation. The agency’s staff can’t usually make a recommendation on whether a deal should be approved until after receiving responses to data requests from the companies involved, sources said. Investors in Time Warner and Comcast, which unveiled their plan to buy Adelphia in April, said they're unconcerned about regulatory delays.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The delay comes as Comr. Abernathy prepares to leave the FCC in less than 3 weeks (CD Nov 18 p8). A vote on the Adelphia takeover hasn’t reached the 8th-floor, said people familiar with the transaction. That makes approval before Abernathy’s exit improbable. Even if another open Commission position is quickly filled with nominee Deborah Tate, sources have said they don’t expect speedy approval because of the FCC’s partisan split. When the item does come up for approval, it’s expected to be voted on in circulation instead of during a Commission agenda meeting, sources told us. Issuance of an information request had previously been delayed because staff attention was focused on reviewing 2 contentious telecom mergers, themselves okayed only after delays, sources have previously said (CD Nov 3 p2). With those deals approved, Chmn. Martin said the Commission would focus on Adelphia (CD Nov 4 p15).
Martin’s office is still working on the information request, sources said. An alternative is to not send out the data request and instead seek information from the companies in meetings. That’s unlikely, said the sources, who expect the request to be issued shortly. The FCC typically makes such requests within 3 months of firms’ filing for FCC transaction review, under the timeline, but 170 days have passed on a voluntary FCC clock without issuance of a request. The clock would have to be stopped before day 180 if the deal isn’t approved, under FCC guidelines.
Comcast and Time Warner said they're working with the Commission, which was deluged with almost 20,000 e-mail comments solicited by media activists that opposed the deal. “We continue to work cooperatively with the FCC, so that they can complete their review in a timely manner,” said a spokeswoman for Time Warner. She said the company had no further comment. Her remarks were echoed by a Comcast spokesman. That firm is “confident [the FCC] will decide on a timely basis,” he said. The transaction will close by April 21, Time Warner official has said. Comcast has said it expects completion in the spring.
Investors we spoke with said they just want to see the deal completed. “It seems like it’s more of a political issue than a financial issue,” said one money manager who asked not to be identified: “There doesn’t seem to be any doubt that it will get done. It’s just a matter of timing.” Approval is likely to come in “the next couple of months, hopefully this year,” said Marshall Front, chmn. of Front Barnett Assoc. The firm owns Time Warner stock worth about $30 million. “I have no concerns,” said Front: “The deal will get done.”