Time Warner and Comcast Sued

Elena
31 May, 2006
New York City

Comcast and Time Warner were accused of price-fixing and bid-rigging in their submission of a joint bid instead of competing against each other to acquire Adelphia''s assets. The America Channel claimed in its lawsuit that the deal violated federal antitrust laws and would reduce competition in the cable TV industry.

[R]8:00AM The America Channel Sued Comcast and Time Warner.[/R]
The America Channel, a startup cable television channel, sued cable giants Time Warner Inc. and Comcast Corp. on Tuesday trying to thwart their plans to acquire bankrupt Adelphia Communications Corp. Comcast and Time Warner agreed jointly last year to buy Adelphia, the nation''s fifth-largest cable operator, for $17.6 billion, and divide up its systems between them. Comcast and Time Warner were accused of price-fixing and bid-rigging in their submission of a joint bid instead of competing against each other to acquire Adelphia''s assets. Comcast serves more than 26 million cable TV customers, while Time Warner has more than 13 million. Adelphia, which filed for Chapter 11 bankruptcy in 2002 has over 5 million subscribers. The America Channel claimed in its lawsuit that the deal violated federal antitrust laws and would reduce competition in the cable TV industry. The lawsuit accused Time Warner and Comcast of conspiring to monopolize local cable systems and of using their alleged monopoly power to refuse to deal with independent networks. Except for seeking an injunction to block the Adelphia deal, TAC is also seeking monetary damages of about $1 billion.


[R]7:30AM Tokyo benchmark closed down on U.S. stocks and oil.[/R]
Asian markets finished lower. The Nikkei index shed 392.12 points, or 2.5%, to 15467.33, reaching its lowest close since Feb. 20. Among the decliners were Canon, dropping 4.2%, Nikko Cordial losing 2.39%. Real estate companies also declined, with Sumitomo Realty & Development down 2.9%. Steelmakers JFE Holdings reported 1% decline. Auto and bank stocks took no exception, as Honda Motor dropped 2.5% and Mizuho Financial Group lost 1.5%. Australian benchmark S&P/ASX 200 index plunged 103.7 points, or 2%, to finish at 5001.7 points on the day''s low. BHP Billiton lost 3.8% and Rio Tinto was down also 3.8%. Singapore''s Straits Times Index fell 2.3% in afternoon trade, to close at 2383.87 points.


[R]6:30AM Oil, banks and telecoms help Europe reverse into profit.[/R]
European markets rose by mid morning. London’s FTSE 100 recouped 0.5% to 5,679.5 , Frankfurt’s Xetra Dax edged up 0.2% to 5,633.39 and the CAC 40 in Paris added 0.1% to 4,896.27. On the corporate front, the telecom sector performed robustly. France Telecom rose 2.3% and Dutch operator KPN advanced 1.6%. Telecom Italia gained 1.6% while Spain’s Telefonica climbed 1.5%. Steel shares remained closely watched, as Corus, the Anglo-Dutch group, posted quarterly earnings below a year-ago level. The company announced that good results will be seen in the next six months. In other news from the sector, the much-talked-about merger of Arcelor with Severstal prompted investors into considering legal action to make Severstal launch a full bid for Arcelor.

Crude oil for July delivery slipped 4 cents to $71.99 a barrel by 0710 GMT, a day after prices advanced 66 cents to their highest close in two-and-a-half weeks on oil demand from China. Brent crude remained unchanged at $71.05 a barrel. The euro gained against the dollar. In morning European trading the euro bought $1.2873, up from $1.2865 the evening before in New York. The dollar slipped to purchase 111.97 Japanese yen from 112.17 the day before, while the British pound advanced slightly to $1.8837 from $1.8829 in New York.