By GREGORY ZELLER //
Time to batten down the hatches, according to one of the loudest opponents of Altice Group’s proposed acquisition of Cablevision Systems Corp.
The Federal Communications Commission announced late Tuesday that the Dutch conglomerate’s $17.7 billion acquisition of Cablevision “serves the public interest,” a major step forward for the proposed deal and terrible news for Long Island customers, according to Jaci Clement, CEO and executive director of the Bethpage-based Fair Media Council.
Altice still needs New York State’s approval to complete its purchase of the regional cable, phone and Internet provider, also based in Bethpage. The deal – which insiders now consider done, for all intents and purposes – would create the fourth-largest cable operator in the nation.
In April, the New York State Public Service Commission – which can impose stiff conditions on the proposed merger – extended its own deadline to pass judgment until May 20. But the FCC’s blessing was considered the acquisition’s biggest hurdle, and according to Clement it was not unexpected.
“It was anticipated,” she told Innovate LI. “It was pretty much announced already that by May 9, this stuff would all be approved by the FCC and the New York Public Service Commission.”
Altice Group, the Netherlands-based multinational telecoms provider headed by French entrepreneur Patrick Drahi, announced plans in September to purchase the Dolan family’s publicly traded cable operator in a deal that includes $10 billion in cash and Altice’s assumption of existing Cablevision debt.
In announcing its approval, the FCC noted Altice’s promise to upgrade Cablevision’s broadband services across New York State. The Communications Commission also cited the findings of a federal review panel, including the Justice and Defense departments, which had “no objection to the grant of the applications.”
Others do object, particularly Clement, who has labeled the proposed acquisition a deathblow to the public interest, public safety and the local economy. Among other concerns, she pointed to Altice’s long history of acquiring media outlets and then slashing staff and services, which Clement considers a recipe for disaster for Cablevision’s 3.1 million subscribers in New York, Connecticut and New Jersey, not to mention thousands of Cablevision employees.
In a Sept. 17 conference call with Altice investors, company principals discussed their intentions to cut hundreds of millions of dollars in Cablevision expenses within months of taking ownership, primarily through reductions in Cablevision’s 14,000-strong workforce. The Dutch master has already suggested employee and operations consolidations between Cablevision and Suddenlink Communications, another recent Altice acquisition based in Missouri. The FCC approved Altice’s $9.1 billion Suddenlink purchase in December.
The proposed deal involves Cablevision assets including Newsday, the News 12 programming network, the free New York City daily newspaper amNewYork and Star Community Publishing, which produces weekly shoppers and community newspapers across Long Island.
The Dolan family, owners of Cablevision Systems Corp., would continue to own media and professional-sports assets through AMC Networks and the Madison Square Garden Co., owner of the National Hockey League’s New York Rangers and the National Basketball Association’s New York Knicks.
In a statement released late Tuesday, Altice said it was pleased with the FCC approval, which confirms “the benefits the proposed merger will bring to consumers in the U.S.” The company said it is on course to close the transaction before the summer.
Clement seemed resolved to the deal Wednesday, and with FCC approval in the rear-view mirror and the PSC’s anticipated thumbs-up coming soon, said her focus now is on transparency. Stopping the deal or forcing Altice to commit to certain news and emergency-information protocols “falls through the cracks of [the PSC’] jurisdiction,” Clement noted, but the commission can insist the companies reveal more of their plans before anyone signs on the dotted line.
“The only hope we have right now is that New York calls for some transparency,” she said. “The FCC finds this in the public interest, which I do not, and they’re pinning that on low-cost broadband in New York’s underserved areas. Well, we have no information about what that means. What’s ‘low cost?’ Who’s going to get it? Does that include Long Island?”
Whatever transparency is forced upon the two parties, Clement still fears the worst, with a regional daily newspaper and primary TV news operations transferring to foreign ownership – and large-scale job cuts all but assured.
“Altice’s customers abroad are paying higher rates because they don’t have any competition to keep their rates down, and on Long Island specifically, there’s isn’t much competition,” Clement said. “Verizon isn’t available in most places and satellite isn’t comparable to cable, so it’s not even a choice.
“People are already preparing for massive layoffs,” she added. “The best case is they would put Newsday up for sale.”