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Consumer Groups Fear Adelphia Breakup

4/30/2004 7:06 AM Eastern

Consumer groups want new cable-ownership limits before the Federal Communications Commission gives any consideration to the purchase of Adelphia Communications Corp. by either Comcast Corp. or Time Warner Inc.

A federal court struck down FCC cable ownership in March 2001, but the agency has failed to adopt new limits, despite public pressure to do so from the Consumers Union and the Consumer Federation of America.

With Adelphia potentially in play, the groups want FCC rules in place to guide the legality of any deal involving Comcast, the largest cable company, with about 22 million wholly owned subscribers, or Time Warner, which had 10.9 million subscribers as of August 2003.

"We ask that you direct the staff not to process any request for permission to acquire new cable systems from Comcast and Time Warner," lawyers for the groups said in a letter Friday to FCC chairman Michael Powell.

The one-page letter complained that the FCC's failure to adopt rules by now was "unconscionable."

The FCC's rules voided by the court limited one cable company to 30% of all pay TV subscribers. Another rule tossed out required cable operators to reserve 40% of their first 75 channels for unaffiliated programmers.

In an April 16 filing, Comcast informed the FCC that under agency rules that take into account both full and partial ownership interests, the company served 26.2 million subscribers, or 28.9% of all pay TV subscribers.

September