Comcast and Time Warner's $17.6 billion purchase of bankrupt Adelphia Communications, has finally been approved. FCC commissioners voted 4 -1 in favor of the sale, with Michael Copps opposing, and Jonathan Adelstein dissenting in part, saying the commission should have imposed network neutrality conditions. The one major proviso: Comcast and Time Warner must put disputes over pricing or access to its regional sports networks to arbitration. Copps, wanting greater consumer protections, suggested that "while rescuing Adelphia is laudable, the anti-competitive combination of assets is not.",adding that nothing in the order "rebuts the truth that competition means higher prices. This decision is about big media getting bigger with consumers holding the bag. Time Warner, in a press release,stated that "now, with virtually all regulatory approvals in hand, we are in good shape to close the transaction by the previously announced target date of July 31."
See related story below: »Last Days of Adelphia

The hearing is underway for the FCC to grant approval for Comcast and Time Warner to buy bankrupt Adelphia's remaining cable operations. The commissioners are expected to approve the $17.6 billion sale despite objections from consumer groups and without stipulating adherence to net neutrality. BBR watched Adelphia's fall from grace, and events were foretold in the poor customer service chronicled in the Adelphia HSI Forum , and retold on the front page. A fuller overview, with play-by-play weirdness, can be found in Karl Bode's »The Sinking of an Empire. Or you can grab a kleenex and wax nostalgic by participating in the »Goodbye Adelphia Poll . Current Adelphia customers may also want to preview their new providers in the »Comcast HSI and »Road Runner forums.

RCN Communications, who once promised a telecom "revolution" in their ad campaigns throughout NYC, has officially overthrown profitability and filed for bankruptcy protection. Numerous media outlets (Reuters, The Street) report that the company is hoping to trim some weight off of their $1.66 billion in debt by entering Chapter 11. In a recent op/ed in the Wall Street Journal (discussed in our RCN forum) RCN CEO David McCourt justified the move into Chapter 11, to a large degree blaming cable monopolies for the company's failures.

As we have been following for some time now, phone, cable and Internet services provider RCN Corp. anticipates filing for Chapter 11 bankruptcy protection in the next week or so. In an opinion column of Friday's Wall Street Journal, RCN Chairman and CEO David McCourt laid out his case for the filing.

WorldCom is set to complete its 21 month journey through bankruptcy, freed of $35 billion in debt and sporting a shiny new MCI name, reports the Washington Post (free registration required). It was a process that was certainly lucrative for many: in the past year alone, lawyers, accountants and consultants have billed the company for $800 million. All in all, things worked out rather well for a company involved in one of the largest accounting scandals in corporate history (provided you weren't relying on a 401k). Also see numerous other sources.

Analysts at Merrill Lynch continue to fuel rumors that Adelphia will be gobbled up by a competitor as soon as the company exits Chapter 11. According to one of the firm's analysts, Cox, Comcast and Time Warner "are the only entities with sufficient balance-sheet strength to entertain a major acquisition of cable systems, among major cable operators." Of those, only Cox and Time Warner are expected to pursue Adelphia's 5.4 million cable customers. Earlier this year Time Warner executives admitted they were looking for "bolt on" acquisitions to help them expand.

Cable provider RCN, which recently filed for bankruptcy, has now been hit with a fine of $1 million per day by the city of Chicago for not building out its cable network, and for defaulting on payments. As usual, people in our RCN forum are on top of it.

As we reported last fall, things haven't been looking particularly good for cable provider RCN. Layoffs and financial troubles have finally caught up with the company, executives announcing the company will be heading into bankruptcy protection - never delivering on that telecom "revolution" their marketing materials long promised. To ease their cash crunch, the company may be looking to sell some of their systems in Pennsylvania according to the Morning Call. One likely suitor could be Time Warner Cable, their executives being very vocal about the fact the company is looking for smaller "bolt on" acquisitions. Since RCN was founded in 1997, they've burned through four billion in cash - and their stock, once valued at $75, now trades for less than a dollar.

WorldCom has declined to make annual payments of $1.5 million to founder Bernard Ebbers under a severance package agreed to on April 29, 2002, which WorldCom says Ebbers has breached. The severance package has been criticized as being overly generous, and negotiated by board members who had close ties to Ebbers.

WorldCom Inc received bankruptcy court approval to swap assets with another bankrupt telco, Metromedia Fiber Network Inc. After exchanging over $12 million in debts, the judge says they can call it even. A Worldcom board member blames competitors for trying to push Worldcom out of business.

Allegiance Telecom, which last week filed for bankruptcy after being crushed by its debt load, apparently paid out some very comfy retention bonuses to executives shortly before filing Chapter 11. First reported this morning in the Dallas Morning News, and then picked up by the Associated Press, the struggling telecom provider doled out $2.3 million for five top executives shortly before dancing into bankruptcy protection. Chairman and CEO Royce Holland is to receive $656,000; chief operating officer Dan Yose and CFO Tom Lord pocket $500,000 each; senior vice president Clay Meyers should be pleased with $375,000; and general counsel Mark Tresnowski walks away with $300,000. The price for failure never smelled so sweet.

Allegiance Telecom yesterday filed for Chapter 11 bankruptcy protection after the company spent the last several months struggling with debt and creditors. According to this Reuters report, the company listed $1.44 billion worth of assets and $1.4 billion of liabilities in it's chapter 11 filing in New York yesterday. The company provided business telecommunications services in 36 U.S. markets, and owed $465 million to its lenders, roughly $100 million on leases of fiber-optic lines, and $650 million to the company's unsecured bondholders.

So maybe you made the mistake of investing in Global Crossing once, sinking a significant amount of cash into a company destined to be crushed under $12.4 billion in debt and eventual Bankruptcy. Would you do it all over again? According to this Forbes story, a second public offering is on the horizon as the company emerges from bankruptcy. Since most of the market conditions that drove companies like Global Crossing under in the first place haven't gone away (sans some very light ethics reform), analysts are less than optimistic. "If I'm a portfolio manager, am I going to go to my boss and put my reputation on the line to buy Global Crossing 2?" barbs one analyst. "That is a very tough sale."

As ISP-Planet reports, chapter 11 is generally a stopover point for broadband providers on their way to chapter 7 and total liquidation. XO Communications has reversed that fortune, recently emerging from bankruptcy lighter and meaner, sporting a fashionable $500 million in long-term debt, as opposed to the $5.1 billion shackles that took the company to the ground. With the seven month process complete, the company must now find a permanent CEO who can guide it through the still turbulent telecom waters.

Focal Communications, a national provider (see footprint) of local phone and data services, yesterday announced that the company has filed for chapter 11. The company's press release indicates that Focal hopes to emerge from reorganization in the first half of 2003.

Rumors of Genuity's demise were far from exaggerated, as the company today filed for bankruptcy and unveiled details of its $242 million deal with Level 3 Communications. Genuity defaulted on its debt in July after Verizon backed out of a deal to re-acquire the company at the last minute. Since that time, rumors had been flying about Level 3's interest, particularly in the wake of the $500 million cash infusion the company received from billionaire investor Warren Buffet.

While many CEO's (and their $200 billion mess) have managed to slip from the public spotlight, Martha Stewart is set to be charged with civil securities fraud. While Enron continues to be the bankruptcy du jour, Worldcom has been pushing for a $25 million retention plan to offer bonuses to 325 key employees, apparently because, as Worldcom themselves note, the company "may not be a particularly appealing employment option for experienced and qualified candidates."

Williams Communications, one of several companies drowned in the fiber glut last April, has found a new lease on life and has emerged from bankruptcy, according to the company's press release and this Reuters report. The company will now be known as WilTel Communications Group Inc., and has begun the hunt for a new chief executive officer. Existing shares of Williams Communications stock were canceled, and it issued 50 million shares of WilTel stock.

With the telecom sector in shambles, many are claiming that bankruptcy laws are a big part of the problem. Not so fast, says Business Week; analysts note that despite the fact that companies are allowed to hobble along for way too long while watering down pricing, there's no evidence that the process harms the economy. That doesn't soothe the worries of industry insiders like Susan Kalla, who blame the delay in economic recovery on the legions of half-dead bankrupt companies. "It's as if companies are coming back to life as zombies....we need the zombies to die."

The hype machine roared upon Teligent's birth, particularly around the hiring of Alex Mandl, who was rumored to be next in line to head AT&T at the time. Instead Mandl shocked everyone and signed on to head Teligent, whose fixed wireless plans never really worked out. Mandl eventually moved on to Gemplus after Teligent moved on to bankruptcy. After some battles with the creditors, Teligent is ready to emerge from the long dark tunnel of financial oblivion, and is preparing emerge from bankruptcy debt-free and fully funded some time around Sept. 16.