VIACOM CABLE SALE UNDER SCRUTINY BY FCC
A proposed deal from Viacom to sell its cable systems for
$2.3B to a minority partnership is under scrutiny by the FCC.
The sale would save Viacom nearly $400M in capital gains taxes
under a program to promote minority ownership in the TV industry.
Senior officials at the agency say the deal will be closely
examined, as the FCC is concerned it "will be a costly drain on
federal tax revenue and will focus criticism on the FCC's
programs to expand minority ownership in the TV and radio
industry. Critics have attacked the deal as a tax "windfall" for
Viacom and the minority ownership program as "a racially biased
set-aside." Viacom is selling its cable systems to help pay off
some of the debt it took on when they acquired Paramount
Communications and merged with Blockbuster last year" (Paul
Farhi, WASHINGTON POST, 1/11).