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Cable Operators

Fitch: Adelphia Acquisition an ‘Event Risk’

7/08/2004 8:45 AM Eastern

Fitch Ratings Ltd. thinks the cable industry faces a time of risk, but risk is good.

The ratings service said Thursday that a potential acquisition of Adelphia Communications Corp. would pose the biggest “event risk” for the industry since Comcast Corp.’s deal to buy AT&T Broadband in 2002.

Fitch believes Adelphia will be acquired outside of bankruptcy, and that deal will lead to numerous secondary subscriber trades or acquisitions as MSOs pursue additional clustering efforts.

These efforts “will lead to an industrywide subscriber-cluster rationalization that will benefit nearly all MSOs,” the company added.

Fitch sees Time Warner Cable as the company with the most incentive to acquire Adelphia, but it added that significant secondary trading would likely occur with Comcast, Cox Communications Inc. and Charter Communications Inc.

September