The Federal Communications Commission (FCC) approved the merger of Comcast
(Quote) and AT&T Broadband (Quote) Wednesday afternoon
in a 3-1 vote.
The other federal agency overseeing the merger, the Department of Justice,
has already signaled its approval of the deal by not filing an objection,
leaving the local franchise operators as the only groups who could
effectively nix the merger. To date, most are agreeing to the deal only
after wringing big concessions from the two companies.
In a press conference earlier today, Kenneth Ferree, FCC media bureau
chief, told reporters the merger of the largest and third-largest cable
companies in the U.S. "posed no substantial public interest harm." The
merger would give AT&T Comcast a substantial lead over its primary
competitor, AOL Time Warner (Quote).
Monday, AT&T exchanged
$11.8 billion of AT&T bonds for AT&T Comcast bonds. To make that happen, a
majority of bondholders (AT&T creditors) needed to sign off on the
merger. Officials said 66 2/3 percent was needed for approval; an
aggregate value of $8.5 billion was tendered, or roughly 90 percent.
The merger has been a contentious one since it was announced earlier this
year. Advocates opposed the deal, saying it would create an oligarchy in
the cable world, and asked Michael Powell, FCC chairman, to tack an
amendment with the approval requiring AT&T Comcast to open up its cable
network to competition. DSL is regulated in this fashion through the
Telecom Act of 1996.
Jeff Chester, executive director of the Center for Digital Democracy,
blasted the commission for its approval, saying it creates a multi-channel,
broadband and digital TV behemoth with 30 percent of the market share in
the industry.
"Under Chairman Michael Powell, the guiding principles of the
Communications Act that the FCC enforce the 'public interest, convenience
and necessity' have become meaningless," he said.
Powell has spent much of his time since taking over the commission creating
policy that puts established cable and DSL providers in competition
with each other, rather than opening up the infrastructure in the two
industries to all comers.
This article originally appeared on internetnews.com.
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