Comcast Corp. chairman and CEO Brian Roberts said Thursday that the company's cable-system transactions with Time Warner Cable related to the acquisition of Adelphia Communications Corp. will give his company about 29% of all pay TV subscribers, just below the 30% cap that a federal court stopped the Federal Communications Commission from enforcing in March 2001.
“As everyone knows, there was a 30% cap. I believe that the combined company after this transaction remains below 30%. It’s in the 29% range,” Roberts said in a conference call with analysts.
Comcast -- which picks up 1.8 million subscribers from the deal, announced Thursday -- will have 23.3 million wholly owned subscribers after the transaction closes. It will continue to own under FCC attribution rules another 3.5 million subscribers in various partnerships. Based on a pay TV market with 92.2 million subscribers, Comcast ends up with 29% of the market.
After the court tossed out the cable cap, the FCC never revived it. Media Access Project, a Washington, D.C.-based public-interest law firm, is considering court action if the commission fails to impose a new cap prior to completing review of the Adelphia acquisition.
“Just to point out, that 30% cap was thrown out by the courts as too confiscatory,” Roberts said, adding that TV-station groups are allowed by the FCC to reach up to 39% of all TV households nationally.
Cable horizontal-ownership rules, mandated by Congress in the 1992 Cable Act, were intended to prevent one cable company from using its clout to make or break new and established cable networks.
Roberts said Comcast’s role in the Adelphia sale would allow it to divest its 21% interests in Time Warner Cable, as required by the FCC in November 2002 when the agency approved Comcast’s takeover of AT&T Broadband. It will also allow, he added, two healthy cable companies to take control of struggling Adelphia.
“So the short answer is that we are optimistic that this is actually consistent with our requirement to get out of the Time Warner Cable position, that Adelphia is a bankrupt operation, that they are losing business [and] that for consumers and for everybody else, this is going to be hopefully welcomed in the local communities with the additional financial and operational resources that this is going to bring,” Roberts said.
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