Media Firm OK to Buy Adelphia: Time Warner Eyes Cable Subscribers

By David Washburn, The San Diego Union-Tribune

Apr. 27–Time Warner cleared its last two local governmental hurdles yesterday in its move to take over bankrupt Adelphia Communication’s cable systems in San Diego County.

Both the San Diego County Cable Television and Telecommunications Review Commission, which covers several unincorporated areas, and the Encinitas City Council gave their approvals yesterday. They joined seven San Diego municipalities that have approved the transfer of approximately 75,000 cable subscribers from Adelphia franchises to Time Warner.

The actual transfer of subscribers won’t take place until Time Warner officially takes ownership of the franchises, which won’t be for at least a few more months, said Time Warner spokesman Marc Farrar.

“We are very pleased to have all of these approvals behind us,” he said.

Adelphia was the fifth-largest U.S. cable TV operator before filing for bankruptcy in June 2002. Last year, Adelphia founder John Rigas and son Tom were convicted of looting hundreds of millions of dollars from the company.

Adelphia and the U.S. Attorney’s Office reached a settlement one year ago in which the company agreed to pay the federal government $715 million in restitution to investors harmed by its previous management.

Around the same time, Time Warner made a deal to take over Adelphia’s systems in 1,800 municipalities nationwide, including Solana Beach, Carlsbad, Vista, San Marcos and Del Mar in San Diego County.

The county’s review commission was originally scheduled to approve the transfer by the end of last year, but the process was held up in October after electrical code violations were found in Adelphia’s system in the county’s unincorporated areas.

The county’s inspector found 164 violations in Fallbrook that posed a risk of electrocution or fire. The inspector estimated that the total number of violations in unincorporated areas exceeded 3,000.

Adelphia made an agreement with the review commission to fix all the violations within 18 months. However, the county needed Time Warner to sign on with the agreement before the transfer could take place, said Barry Fraser, the San Diego County cable franchise administrator.

“We wanted to make sure we had something in there that had some teeth to it,” he said.

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