Category: Cable Franchise Transfer 101

The Adelphia franchise assignments were the most difficult in the last decade, and, with any luck, will keep that status for some time to come.

Frankly, Aldephia, Time Warner and Comcast played their hands very well; their strategy minimized the number of communities that actually considered the assignment request and tested the endurance of those communities with the fortitude to defend local franchising authority rights before the bankruptcy court. I’m proud to say that one of my clients was among that last group standing.

The companies’ effort first began with
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Several multi-billion-dollar cable company mergers have occurred over the last decade. The largest in history happened in 2002 when Comcast purchased AT&T Broadband for about $55 billion. On the horizon for 2005 is the sale of Adelphia Communications to Time Warner and Comcast. That sale will fetch around $18 billion.

With transactions of this size, we all expect the federal government to get involved, and it does. The Securities and Exchange Commission, for example, reviews proposed transactions to ensure that the deal will not have an adverse affect on competition. The Federal Communications Commission also gets into the act and determines whether a proposed transaction is in the broader public interest.

What surprises many, though, is that local governments can assert their interests in some transactions — even in the case of a multi-billion-dollar cable company mega-merger. The process is typically governed by the community’s franchise with the operator; federal law and regulations also play a role. This article provides an overview of the process, some of the issues to be considered, and tips on how to survive the procedure (it’s not really painful, even if it may occasionally sound like it is!)
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