FCC OKs AT&T Comcast

Comcast can acquire AT&T Broadband and create a cable behemoth with 27 million subscribers as long as the new company has nothing to do with Time Warner Entertainment (TWE), the Federal Communications Commission ruled today.

In a 3-1 decision, opposed by lone Democrat commissioner Michael Copps, the federal agency determined that more good than harm will come from a bigger cable entity--as long as that entity doesn’t include $10 billion worth of complicated TWE programming and subscriber assets that have been “haunting the commission since AT&T’s acquisition of MediaOne several years ago,” said Media Bureau Chief Ken Ferree. Those assets will be placed in a trust that the company must divest in five years.

“We worked very closely with them on the terms of the proposal,” said Ferree. “The entire TWE interest, everything that’s in it now, will be out of the hands of AT&T Comcast from day one.”

Comcast AT&T, with FCC approval, will name trustees for TWE, which also includes subscribers who would have brought the size of the merged cable company to 40 million customers, Ferree said.

Other than TWE, the commissioners liked the merger, preferring to address issues such as open access for multiple ISPs, the threat that Comcast's iron grip on sports programming in the Philadelphia market will extend to other areas of the country and limit consumer access to programming choices, and any guaranteed of a faster broadband or cable telephony build out.

“The commission limited its review to issues that were within the four corners of this transaction,” Ferree said. “To the extent concerns were raised about the cable market generally or issues related to the cable market generally, the commission is quite clear that it will look at those issues and analyze those issues in the appropriate context, whether that’s in our cable modem proceeding, our horizontal concentration proceeding with regard to issues related to programming, or some other more specific or more tailored context.”

Comcast AT&T, he said, “solves problems, it does not create them.”

In his statement opposing the deal, which is still being reviewed by the Justice Department, Copps cited a concern that public interest benefits from the “huge consolidation of commercial power are vastly outweighed by the potential for significant harm to consumers, the industry and the country.”

Both AT&T and Comcast offered nondescript comments on the deal, with a statement from Comcast President Brian Roberts stating: “We are very pleased that the FCC has favorably concluded its review of our merger. We look forward to moving ahead expeditiously to closing.”

James Cicconi, AT&T general counsel and executive vice president law and government affairs, said the approval “represents a major milestone in delivering quality broadband services to consumers and value to our shareholders.”