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22 Jan 2011

FCC approves Comcast-AT&T merger

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January 22, 2011 Category: Color Of Money Posted by:

By David Ho

ASSOCIATED PRESS

 

WASHINGTON — The $29.2 billion merger of Comcast and AT&T Broadband was approved by federal regulators Wednesday, clearing the way for creation of the nation’s largest cable television company.

 

The Federal Communcations Commission agreed to the deal over the objections of consumer groups which filed a motion last week asking the FCC to delay its decision. The groups claim the new cable giant would limit customers’ choices in television viewing and Internet access.

 

Comcast, the nation’s third-largest cable operator with about 8.5 million subscribers, would acquire AT&T Broadband, the largest cable operator, to form a new AT&T Comcast with 22.3 million subscribers.

 

The new company would have nearly twice as many customers as the No. 2 cable company, AOL Time Warner Inc.

 

FCC approval was the final hurdle for the companies, which proposed the merger in December. The deal, originally valued at $47 billion in stock plus assumption of about $25 billion in debt, has declined in value by about 35 percent as Comcast’s shares have fallen along with the rest of the market over the past year.

 

The companies announced last month that as operations are merged, 1,700 jobs identified as redundant will be cut at AT&T Broadband’s headquarters in Englewood, Colo.

 

AT&T Broadband has about 40,000 employees and Comcast Corp.’s cable division has about 20,000.

 

Consumer groups said in their motion to the FCC that creation of such a large cable company would reduce competition, resulting in higher rates, less diverse programming and fewer choices of high-speed Internet service providers available via cable.

 

Comcast and AT&T Broadband disagreed and said they “have repeatedly stated on the record that they have not and will not restrict their subscribers from accessing any content available on the Internet.”

 

Shares of Comcast fell 89 cents, or nearly 4 percent, to $23.11 in afternoon trading on the New York Stock Exchange, wehre shares of AT&T fell 37 cents to $13.49.

 

Statement of Ralph B. Everett, President and CEO of the Joint Center for Political and Economic Studies on Approval of the Comcast-NBC Universal Joint Venture

 

The Federal Communications Commission (FCC) and Department of Justice’s (DOJ) approval of the Comcast-NBCU transaction contains important public interest provisions which we believe will go a long way toward addressing broadband access in low-income and hard-to-reach communities. As part of the deal, Comcast has voluntarily committed to offer high speed Internet service at less than $10 per month — along with digital literacy training opportunities and deep discounts on computer equipment — to more than 2.5 million low-income households. Comcast has also agreed to add 400,000 homes to its service area. In addition, Comcast will provide free video and high speed Internet service to 600 anchor institutions that do not presently have it, including schools and libraries in low-income areas.

 

We applaud FCC Commissioner Mignon Clyburn for vigorously insisting that the interests of low-income communities be taken into account throughout the approval process.

 

The Joint Center’s research has shown that a lack of accessibility and the overall high cost of broadband are barriers to broadband acceptance and use. In every community and for people at every income level, broadband Internet is crucial for finding jobs, purchasing goods and services at lower costs, managing healthcare information, participating in distance learning, innovating, and a host of other benefits and activities that many take for granted. The fulfillment of the commitments agreed to in the Comcast-NBCU transaction will have a direct impact on millions of Americans who will soon have the tools they need to be full participants in the modern economy.

 

The Joint Center for Political and Economic Studies is one of the nation’s leading research and public policy institutions and the only one whose work focuses primarily on issues of particular concern to African Americans and other people of color. To learn more, please visit www.jointcenter.org.

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