The Federal Communications Commission is expected to pave the way today for the sale of Adelphia Communications Corp. assets to Comcast Corp. and Time Warner Inc.
The regulating authority is scheduled to vote on whether to approve the transfer of cable operating licenses from Greenwood Village-based Adelphia to the nation’s two largest cable companies.
The $17.3 billion sale is the largest of a bankrupt company in U.S. history and has been under review by the FCC for more than a year.
If approved, the deal will close by the end of the month, and Adelphia’s cable system will be divvied up between New York-based Time Warner Cable and Philadelphia-based Comcast. Adelphia will still exist after the deal while the company seeks to pay off creditors and emerge from bankruptcy.
On Wednesday, a U.S. bankruptcy court extended the voting deadline for the company’s reorganization plan. Creditors have until September to decide how to divide the cash from the asset sale.
“Adelphia soldiers on as an entity,” said Adelphia spokesman Paul Jacobson. “We would still be bankrupt after the sale, but we would go from an operating cable company to a company with a large pile of cash and stock.
“After the money is distributed to creditors, Adelphia ceases to exist.”
Adelphia in June 2002 filed the 11th-largest bankruptcy by asset size in U.S. history, following an accounting fraud led by founder John Rigas and his son Timothy Rigas, who was chief financial officer. Both were convicted in July 2004 of conspiracy and securities fraud.
“There isn’t any real suspense about whether the FCC will approve it, but will they attach any meaningful conditions to the transfer?” said Craig Moffett, vice president and senior analyst for Sanford C. Bernstein.
FCC Chairman Kevin Martin last month proposed requiring the buyers to grant competitors access to local sports programs as a condition of the sale.
When the deal closes, Adelphia’s 5.2 million subscribers in 31 states will become Time Warner Cable or Comcast customers.
In Colorado, about 100,000 Adelphia customers in the Colorado Springs area will automatically become Comcast customers. Comcast currently has 700,000 Colorado customers.
Some of Adelphia’s 1,020 Colorado employees will become Comcast workers. Cuts are expected among the company’s 120 employees at its headquarters, Jacobson said. A 600-person customer call center in Colorado Springs will be operated by Time Warner.
In addition to buying Adelphia assets, Comcast and Time Warner have agreed to trade certain markets, “redrawing the cable map in profound ways,” Moffett said.
Time Warner will gain some power in the move, controlling cable markets in Los Angeles and New York. Los Angeles would go from five cable providers to three, with Time Warner controlling 75 percent of the market.
Comcast would swap a market in Texas for one in Florida, making it the dominant cable provider in that state. The company also would be the predominant provider in New England, Chicago, the Midwest and northern California.
The Associated Press contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-820-1088 or kjohnson@denverpost.com.
