Copyright 2005 Gannett Company, Inc.


July 25, 2005, Monday, FINAL EDITION

By David Lieberman

From Lexis Nexis

NEW YORK -- Time Warner took the lead in forging its $12.7 billion deal with Comcast to buy Adelphia Communications. But in filings at the Federal Communications Commission last week, critics targeted the No. 1 cable operator in a campaign to persuade regulators to block or impose conditions on the deal.

"Comcast has a leave-no-prisoners approach that upsets people," says Media Access Project President Andrew Jay Schwartzman.

But while critics say the companies will have near-monopoly power in key markets after dividing Adelphia's 5.2million subscribers and swapping some systems, few say regulators will block the deal, expected to close early next year. "There's very little risk it won't be approved," says Precursor Group CEO Scott Cleland.

DirecTV wants FCC Chairman Kevin Martin and his colleagues to require Comcast and Time Warner to submit to arbitration when there's a programming dispute, similar to a condition News Corp. faced in 2003, when it bought a controlling stake in the satellite firm. DirecTV says Comcast uses its clout to overcharge for regional sports channels in Chicago and Sacramento, and won't let DirecTV offer Comcast SportsNet Philadelphia.

That could worsen in a deal solidifying Comcast's control over cable subscribers in Philadelphia and Minneapolis-St. Paul and Time Warner's in Los Angeles, Dallas-Fort Worth and Cleveland-Akron, Ohio.

"We're prohibited from doing what they can do," says DirecTV's Susan Eid. "There's a perversion there."

Mid-Atlantic Sports Network, which broadcasts the Washington Nationals and Baltimore Orioles, also wants mandatory arbitration. It says Comcast refuses to carry the channel in Washington to bolster Comcast SportsNet Mid-Atlantic -- and fears that, after the deal, Comcast might do the same in Baltimore.

In addition, consumer advocates want rules to ensure that outsiders have access to the cable companies' Internet lines and video-on-demand services.

Comcast's David Cohen rejects what he calls "largely unsupported and often unfocused arguments." He says that the program-access requirements for DirecTV "were to mirror the ones already put on us." And he says that Mid-Atlantic Sports Network's Peter Angelos "simply violated a contractual agreement with CSN," which is now being litigated.

Cohen says the filings don't "properly address the pro-public benefits" of the deal, which the cable companies say will help them provide new services and compete with satellite and phone companies.