The FCC Approves Time Warner Cable Split

On Wednesday, the Federal Communications Commission approved the Time Warner Inc. split of its cable enterprise Time Warner Cable without notable stipulations. This approval was the final obstacle in the split, and according to the FCC, the transaction “is likely to benefit the public interest.”

Time Warner, the nation’s second largest cable company following Comcast Corp, hopes to spinoff 84% of its cable enterprise. The split is a response to Wall Street demands that Time Warner reaffirm itself as a pure media content company, in hopes of boosting company stock prices.

Officials from Time Warner predict that the spinoff will be finished by March 31. Wall Street has been patiently awaiting confirmation, as the review process has taken longer than anticipated. The split has been looming at Time Warner Inc. for more than seven months; most transactions are completed in less time.

"At the very least, the announcement essentially removes the last remaining doubt that the separation and payment of the attendant special dividend will be completed before the end of the quarter, and the expiry of the existing separation agreement," stated analyst Craig Moffett at Sanford Bernstein.

Sanford Bernstein failed to include conditions demanded by some groups. For instance, stipulations may require that Time Warner settle carriage disputes pending within the agency, and that it terminate pay-per-view adult content.

"The transaction will lessen the extent to which TWC is vertically integrated with program providers and will eliminate the vertical integration of Time Warner by separating it from TWC," stated the FCC.

The next step for the split will require approval from the Internal Revenue Service. The transaction will include a one-time payment of $9.25 billion by Time Warner Cable to Time Warner Inc.