Direct TV Files With FCC Over Adelphia Bid

Direct TV filed papers Thursday with the Federal Communications Commission calling for restrictions to be put in place on Comcast and Time Warner's joint bid to buy the assets of Adelphia Communications. In the complaint, the satellite provider argued that the USD.17.6 billion deal could squash competition inasmuch as it would allow the

MSOs to build local monopolies. Specifically, Direct TV said it is concerned that by beefing up their local clusters, Comcast and Time Warner will be able to price their satellite rivals out of their proprietary regional sports network programming.

"Both of these cable operators have a history of exercising such market power where they already have it," Direct TV said in the filing, which crossed the FCC's transom before the midnight deadline. "In particular, both have arranged to withhold, or raise the cost of, 'must have' regional sports network programming in such strongholds as Philadelphia and Charlotte. The transactions would create many more such 'regional monopolies' where anti-competitive behavior would be likely."

Direct TV proposed that two conditions be met before the deal is finalized. One would block both MSOs from entering into an exclusive agreement with an RSN, while the other would call for binding arbitration should negotiations over RSN carriage fail.

While there is only a slim chance that the FCC would actually block the sale, opponents say that the deal will put Comcast over the 30 percent market share cap. Comcast currently serves about 29 percent of all U.S. cable homes; that said, the cap is in a sort of regulatory limbo, as a federal court threw it out four years ago. The complainants would therefore have to lobby the Commission to revive the cap if there's any hope of the deal getting blocked.

Besides Direct TV, a host of other aggrieved groups have added their respective voices to the debate as well, including the Center for Digital Democracy, the Communications Workers of America and the International Brotherhood of Electrical Workers.

In a joint statement, the two trade unions averred "consumers and the public interest would be the clear losers if this transaction is permitted to go forward. It would restrict competition for the distribution of programming, allow two companies to block other competitors' access to programming and result in higher rates for consumers."
 

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