A thorn in Time Warner Cable's side: The Omaha Forbearance Order

Posted Nov 13th 2007 4:20PM by Jon Ogg
Filed under: Time Warner Cable (TWC)

In an interesting yet complicated FCC Filing from Covad (AMEX: DVW) and from XO Communications (OTCBB: XOHO), these two small communications players appear to be seeking more growth assistance in the New York area. The press release indicates that Time Warner Cable Inc. (NYSE:TWC) falls far short of the one-fifth market penetration level understood to have been required by the FCC to approve past requests for forbearance from key unbundling obligations.

The press release gets more complicated from here. The two smaller players apparently are citing the Omaha Forbearance Order for MSA's in 2005. If taken to an extreme, this could force larger carriers to offer cost-based rates to smaller carriers to allow for more broadband services to be offered on a competitive basis.

What's this mean for TWC? Could this be the start of bigger troubles? Who's behind the filing? We'll have to stay tuned to find out. Regardless of what ultimately happens, this is a thorn in TWC's side: Big companies rarely welcome more competition.

Tags: cable penetration, cap-ex, Covad, DVW, FCC, Omaha Forbearance Order, OmahaForbearanceOrder, TWX, XO Communications, XOHO