Cablevision Spinoff Gets More Time

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Cablevision Thursday won an extra nine months from the FCC to make sure its New York City license for a new type of television service doesn't violate the agency's cross-ownership restrictions.

To meet the FCC's conditions, Cablevision is spinning off its new DBS subsdiary and its 49% invesment in DTV Norwich, a company that plans to launch a microwave-delivered competitor to DBS and cable. The spinoff is a condition of granting DTV Norwich's New York City license.

FCC cross-ownership restrictions prevent licensees of the new service from also owning a cable system in the same market. To satisfy the cross-ownership worry, Cablevision plans to spin off its investment in DTV Norwich and its Rainbow DBS satellite TV service into a new company owned by Cablevision shareholders.

Cablevision asked for the extra time to make sure it obtained Securities and Exchange Commission approval for the spinoff and to make other arrangements necessary for the deal. 

The extension gives Cablevision a full 360 days to complete the spinoff once the New York City license is final.

In addition to completing the spinoff, Cablevision must make sure the new company, Rainbow Media Entertainment, has established independent credit and banking relationships and has installed its own financial and management structures to operate as a public company.

DTV Norwich in January won the licenses covering New York City and 46 other markets for a new pay-TV service that will transmit programming via microwave towers.

The service is meant to be a new competitor to cable and DBS. DTV Norwich is expected to provide channel capacity to Rainbow Media Entertainment's new VOOM DBS service.

channel capacity to Rainbow Media Entertainment's new VOOM DBS service.