The cable TV market in Los Angeles and several other major cities is ready for a radical makeover after federal regulators today approved the sale of bankrupt Adelphia Communications Corp. to Time Warner Inc. and Comcast Corp.
Time Warner will become Southern California's largest cable provider under the deal, as it acquires Adelphia's 1.1 million subscribers in the area along with Comcast's 600,000 in a complicated swap of assets between the two cable giants.
Time Warner will jump from 15% of the Southern California market to 75% as its subscribers increase to 2.4 million. In the city of Los Angeles, Time Warner will have a virtual cable monopoly with its 1.9 million subscribers amounting to 99% of the market.
Because of concerns about the increased market power of Time Warner and Comcast in markets such as Los Angeles, the Federal Communications Commission included several conditions in its 4-1 approval of the $17.6-billion deal. Among them are restrictions on Time Warner and Comcast from withholding regional sports networks from other providers, such as satellite television, to lure viewers.
FCC Chairman Kevin J. Martin said the deal promises to significantly improve cable service for Adelphia's subscribers. The company has failed to upgrade its system in Los Angeles and elsewhere since filing for bankruptcy protection in 2002.
"Comcast and Time Warner have committed to make long-need upgrades to those systems to enable the rapid and widespread deployment of advanced services to Adelphia subscribers," Martin said.
In Los Angeles, Time Warner is vowing to spend millions to offer residential phone service and high-speed Internet access.
The conditions imposed on the deal were not enough for FCC Commissioner Michael J. Copps, who voted against it because of fears that reduced competition in cities like Los Angeles would lead to higher prices for customers.
"This decision is about big media getting bigger, with consumers left holding the bag," said Copps, one of two Democrats on the Republican-controlled commission. "This is not a consumer-friendly transaction."
sale of bankrupt Adelphia
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