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Activists Aim at Adelphia Deal
Coalition seeks conditions on approval
By Bill McConnell Broadcasting & Cable
Media activists, with major union backing, are preparing an all-out assault on the Adelphia deal, where Comcast and Time Warner plan to divvy up the spoils of their $17.6 billion purchase of the troubled operator. Leading the charge are the Center for Digital Democracy, Common Cause and Free Press, which banded together to block the FCC's deregulatory media ownership changes in 2003.
Common Cause was scheduled to host an organizational conference call Friday, April 29 to brainstorm strategies for the 12 months that the government's review of the Adelphia deal is expected to take.
The activists concede that blocking the deal is a long shot. But they like their chances of winning some government conditions. Some examples: forbidding the operators from blocking or restricting competing content over their high-speed Internet lines; limiting cluster size in major markets; requiring the companies to sell sports networks and other in-house programming to rival distributors.
Army of protesters
Adding muscle to the push will be the Communications Workers of America. Since taking over AT&T Broadband in 2002, Comcast has worked hard to persuade the 3,500 union workers it picked up to drop their union affiliations. CWA, which represents the technicians, installers and drivers, has lost several decertificaton votes since the merger.
â€œComcast is the Wal-Mart of the media industry,â€ says Center for Digital Democracy's Jeff Chester, comparing the cable giant to the famously union-phobic retailer. Comcast defends its policy.
â€œA central tenet of our company is that all employees should have the choice whether or not to be represented by a union,â€ says a Comcast spokesman. â€œOur employees have consistently chosen to work in a non-union environment because our company invests in people.â€
Regardless, CWA's losses could be Chester and company's gain. They now have a ready army of seasoned protesters to marshal against Comcast CEO Brian Roberts as he seeks approval from the FCC, the Justice Department, and a score of local cable regulators around the country for the deal.
The activist coalition played a major role in organizing protests against the FCC's 2003 deregulation of broadcast-ownership limits, which was ultimately derailed by legal challenges. The Adelphia deal is the loose coalition's first chance to mobilize since those protests.
The groups argue that putting conditions on the deal is justified because of the huge clusters Comcast and Time Warner plan to create by, in Friedman Billings Ramsey media analyst Alan Bezoza's words, â€œtrading properties like a game of monopoly (pun intended).â€
For instance, Comcast's Miami/West Palm Beach cluster will serve 1.53 million subscribers, roughly 57% of the homes in South Florida. Time Warner will serve 3 million customers in the Los Angeles region.
In announcing the deal, Roberts described bigger clusters as a benefit to consumers: â€œAdding these subscribers, many in high-growth, geographically desirable areas, will allow us to roll out our new products and services rapidly.â€
The activists counter that clustering rarely benefits consumers. â€œComcast and Time Warner will strengthen their chokehold over prices and programming in those markets,â€ says Kenneth DeGraff, policy analyst for Consumers Union, adding that new services don't make up for the added costs the operators will impose. Besides gauging their own muscle, the groups see the deal as a chance to test new FCC Chairman Kevin Martin's willingness to condition mergers on public-interest obligations.
Although Martin has strongly supported media-ownership deregulation, he has showed signs of a pragmatic willingness to bargain for the votes of Democratic Commissioners Michael Copps and Jonathan Adelstein.
The anti-merger campaign â€œis going to be terrible for Comcast's and Time Warner's reputations,â€ Chester says. â€œBut this will be a test for Martin as well.â€