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.
Tex. Gov. Rick Perry (R), reversing his ground, will allow final approval of video franchising rules that had been delayed, sources at the state capitol said late Tues. (CD Aug 17 p1). Perry and Lt. Gov. David Dewhurst, who signed the bill Tues., had previously signaled they'd block any bill, including video franchising, until education initiatives were passed (CD July 21 p2). With time running out on the Tex. legislature’s 2nd special session, Dewhurst and Perry decided against opposing the bill, we're told. Meanwhile, one of the next battleground states for such legislation may be N.J., where lawmakers are expected to return to the capitol later this year.
Comcast is in the early stages of a long-term strategy to make it possible for video on demand (VoD) shows to carry ads directly targeting cable subscribers. The cable operator is encoding ads with entire programs, but not yet for individual customers, Paul Woidke, vp- technology for Comcast’s Spotlight business, said in an interview. The company hopes eventually to adjust marketing based on time and perhaps customer demographics, he said. The firm said earlier this week that it’s working with advertisers it declined to identify, who are pleased so far (CD Aug 16 p3).
Carl Icahn confirmed press reports (CD Aug 12 p11) he’s pushing Time Warner to restructure. The financier said he and a block of allied investors own stock or options representing 120 million shares -- a 2.6% stake, worth about $2.22 billion. Icahn wants the firm to separate Time Warner Cable from its other businesses and repurchase at least $20 billion in stock. The company said earlier this month it would buy back $5 billion in shares after they had fallen by more than half since the combination of Time Warner and America Online (CD Aug 8 p2). Icahn said he and Time Warner CEO Richard Parsons will meet this week; a company spokeswoman confirmed that. Time Warner is “committed to creating long-term value for all shareholders,” the spokeswoman said. She didn’t elaborate on how the company may respond to Icahn, who wasn’t available to comment beyond a statement. Time Warner said previously it plans to sell shares of its cable unit following the purchase of some Adelphia systems with Comcast in a $17.6 billion transaction.
The FCC wants input on a variety issues for its annual video competition report, including obligations Bells may incur to as they start to sell their own pay-TV services. The notice of inquiry (NOI) for the 12th annual assessment of the market for delivering video programming also requests analyses of how conglomeration affects programming and seeks opinions on the DTV transition. The NOI, issued Fri., stalled amid an 8th-floor tussle over deregulating DSL, and was pulled from the Commission’s August meeting agenda.
Tex. lawmakers again passed video franchise rules that would speed Bells’ entry into pay TV. Passage came after a months-long delay and amid a summer-session squabble over education. Chances of final approval rose this time when Gov. Rick Perry (R) indicated he'd consider breaking the logjam by signing the bill. Previously, the governor and Lt. Gov. David Dewhurst (R) signaled they'd block any bill, including video franchising, until education initiatives pass (CD July 21 p2).
Cablevision’s Rainbow Media settled litigation with Time Warner over its AMC network, Rainbow CEO Josh Sapan said on a teleconference discussing 2nd-quarter results. He declined to discuss terms of the July 28 settlement in principle. A dispute between the 2 companies hurt affiliate revenue last quarter, Sapan said. Rainbow said 2nd-quarter operating income, sales and cash flow all fell, missing some analyst estimates. “Rainbow bears are gaining credibility in light of the mediocre Rainbow numbers,” Janco Partners analyst Matt Harrigan wrote in a client note. Time Warner Cable was allowed last month to end a 1993 carriage deal with AMC under a N.Y. State Supreme Court finding that AMC broke the terms of the deal (CD July 13 p11). Cablevision’s overall profit was $222 million in the quarter partly on the gain from the sale of affiliate interests, vs. a loss of $187.1 million a year ago, partly because of a loss on debt repayment.
Penny Nance, who lobbied against pornography, was hired by the FCC as a special advisor. Nance works part- time in the Office of Strategic Planning & Policy Analysis, said an FCC spokesman. She'll advise on broadcast and cable policy, including social issues, he said. As founder of Kids First Coalition, Nance has testified about online pornography. “New technology is so valuable to us as a country, but with it comes new challenges and responsibilities,” she told the House Subcommittee on Commerce, Trade and Consumer Protection in 2004. “The companies profiting from the technology must also share in the responsibility.” Nance was a board member of Concerned Women for America (CWA), whose mission is to “protect and promote Biblical values… reversing the decline in moral values,” according to its Web site. She left CWA’s board in June, a CWA spokeswoman said. Nance didn’t return a phone message and e-mail seeking comment.
The America Channel, having failed to get carriage on Comcast, said the company acted unfairly in striking deals with other networks. The digital channel also said some of Comcast’s reasons for not carrying it are hypocritical. Comcast said in a July 21 letter to the network that “bandwidth on a cable system is limited,” which the channel alleges is contradicted by its comments to the FCC on a deal with Adelphia. “Comcast cites as one of the primary benefits of the proposed transactions that Adelphia systems will be upgraded,” the network said in an FCC ex-parte filing. That document was filed as part of the FCC’s “permit but disclose” review of Comcast and Time Warner’s proposed $17.6 billion purchase of Adelphia systems, Kathleen Wallman, govt. affairs advisor for the network, told us. That filing said Comcast may give preferential treatment to affiliated networks, potentially violating FCC rules. There’s no lack of “'fair access'” at Comcast, it said in the July letter. The channel “has made multiple FCC filings in connection with these transactions, and we will respond to them, and any other filings, in our written reply Friday,” Comcast said in a statement to us. Comcast has until Fri. at 11:59 p.m. to file its response to comments about the Adelphia deal, which has been opposed in about 14,000 e-mails (CD Aug. 4 p2).
Time Warner’s deal to pay $2.4 billion to settle shareholder litigation over claims of inflated revenue and improper accounting at AOL may help the company curry favor with the FCC, which is considering its proposal to buy Adelphia cable systems with Comcast, analysts said. The agreement in principle to settle the securities class action against the company was disclosed in Time Warner’s 2nd-quarter earnings report Wed. Some results fell short of analysts’ estimates. Broadband sales at the company’s cable unit were the bright spot.