Direct TV Opposes Cable Merger

Direct TV Inc. has asked the Federal Communications Commission to put restrictions on Adelphia Communications Corp.'s joint merger with Time Warner Inc. and Comcast Corp., the Hollywood Reporter reported Thursday. Part of media mogul Rupert Murdoch's News Corp., Direct TV claims the proposed USD.17.6 billion deal could stifle competition in markets where the two cable giants
 
can solidify their customer base. In particular, Direct TV worries the deal will let the companies withhold popular sports programing from satellite TV operators.

"Both of these cable operators have a history of exercising such market power where they already have it," Direct TV stated in a filing. "The transactions would create many more such 'regional monopolies where anti-competitive behavior would be likely."

Direct TV says the companies should be subjected to similar restrictions that were placed on News Corp. when it bought Direct TV.

The alliance between New York-based Time Warner (NYSE: TWX) and Philadelphia-based Comcast (NASDAQ: CMCCSA, CMCSK) is part of an effort to appease anti-trust regulators who are demanding that Comcast divest its 27.6 percent stake in Time Warner Entertainment. If the merger is approved, Greenwood Village-based Adelphia (Pink Sheets: ADELQ) would be spun off into a different entity.

The merger must clear several hurdles, including approval by regulators and bankruptcy court.

Adelphia says it will use most of the assets from the merger to reimburse creditors more than USD.9 billion in cash and stock. Investors lost billions of dollars when Adelphia -- the nation's No. 5 cable TV company -- collapsed in 2002, amid claims that its founding family siphoned millions of dollars of funds for personal use while misrepresenting the company's financial condition.

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