Comcast Petitions FCC to Block Bell Atlantic's Acquisition of Wireless Cable Licenses

Strategic Insights -

Comcast, a major cable provider, has filed a petition with the Federal Communications Commission (FCC) to deny Atlantic Microsystems' application to transfer wireless cable licenses to Bell Atlantic. Comcast alleges that this acquisition would put Bell Atlantic in violation of federal rules barring a single company from owning interests in both wireline and wireless cable systems serving the same community. The proposed acquisition would allegedly eliminate wireless cable as an independent competitor in Bell Atlantic's wireline service area.

Key Takeaways:

  • Comcast has petitioned the FCC to deny Atlantic Microsystems' application to transfer wireless cable licenses to Bell Atlantic.
  • Comcast alleges that the acquisition would put Bell Atlantic in violation of federal rules barring a single company from owning interests in both wireline and wireless cable systems serving the same community.
  • Bell Atlantic has announced plans to build wireline networks for the provision of video services in the Philadelphia area.
  • Comcast's President, Thomas G. Baxter, stated that either Bell Atlantic intends to operate both wireless and wireline cable in the same community or plans to shut down its wireless cable network when the wireline network is completed, both of which are anti-competitive.
  • Comcast asked the FCC not to permit the transfer of the licenses to Bell Atlantic and to require Bell Atlantic to divest those licenses prior to its entry into the wireline cable business.
  • Comcast also asked the FCC to apply cost accounting requirements to Bell Atlantic's operation of wireless cable systems to guard against anti-competitive cross-subsidization.

Statistics:

  • Comcast serves over eight million customers worldwide.
  • Comcast's Class A and Class A Special Common Stock are traded on The Nasdaq Stock Market under the symbols CMCSA and CMCSK, respectively.
  • The proposed acquisition would allegedly eliminate wireless cable as an independent competitor in Bell Atlantic's wireline service area.

Sources:

  • Comcast Corporation press statement, June 2, 1995
  • Bell Atlantic Corporation SEC filing, June 2, 1995
  • Federal Communications Commission rules and regulations, applicable as of June 2, 1995