FCC OKs Altice/Suddenlink Over Little Opposition
FCC approval of Altice buying a majority of Suddenlink in a deal worth about $9 billion without any major conditions was expected, since there were no competitive worries or potential consumer downsides associated with the deal, one communications industry lawyer familiar with the deal told us, saying it would have been surprising if the agency had imposed any conditions. But how the approval granted Friday affects Altice's planned buy of Cablevision remains to be seen, the lawyer said. Altice and Suddenlink filed a joint application seeking regulatory approval in June (see 1506040047) and Altice said it hoped to close on the deal by year's end.
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"The likely public interest benefits outweigh any potential public interest harms," the FCC said in a memorandum opinion and order approving the $9.1 billion transaction. "Other than the ordinary market risks that accompany any business transaction, there is no evidence in the record indicating that this transaction will be likely to result in financial harms or distress that would compromise Altice's ability to maintain and improve broadband and other services in the Suddenlink service territory." That Netherlands-based Altice has no ownership stake in any U.S. communications company means the deal poses no horizontal or vertical competitive concerns, it said. Nor will Altice with Suddenlink have notable market power or significantly reduce competition at the local, regional or national levels, the FCC said. And there's no proof Altice won't follow through on what it said was a record "of investing in the service providers Altice acquires while improving its offerings and competitive portion in the market to the benefit of consumers," the FCC said.
The Justice Department signed off on the deal earlier last week (see 1512160051). The only condition the FCC put on Altice is that it's subject to compliance with the terms of the national security agreement signed with the DOJ. The commission order was approved by the International, Media, Wireless and Wireline bureaus.
In a statement Friday, NCTA President Michael Powell said Altice, now in the U.S. market, "can offer fresh insight and perspective to us." Altice didn't comment.
The deal got scant opposition comment. The objection from the Humboldt County Board of Supervisors in Northern California, and from Access Humboldt, involved an ongoing dispute with Suddenlink about public, education and government access fees being paid to Humboldt County (see 1507240027). The California Emerging Technology Fund had said the FCC as a general matter should set affordable broadband conditions on transactions (see 1508110066). "In the case of this particular transaction ... these issues are outside the scope of our review," the FCC said, since there are no transaction-specific harms inherent in the Altice/Suddenlink deal.
One filer, MFRConsulting, raised questions about how the debt from the transaction would affect Suddenlink operations. There's no evidence in the record that incurred debt "would likely diminish Altice's ability to invest in the Suddenlink service territory," the FCC said. Altice's planned $17.7 billion takeover of Cablevision faces more opposition and calls for conditions (see 1512080013). Cablevision will likely see much more regulatory scrutiny because of its size and also because the cable operator's New York City-area operations mean New York Public Service Commission oversight, said Martyn Roetter of MFR, who said he is not representing any clients in the proceeding.