A month after Time Warner Cable laughed off Charter’s $37 billion merger offer, the cable company has reportedly reached a $45 billion deal with Comcast that would make its nearly 15 million customers permanent citizens of Kabletown.
Citing the always-reliable “people familiar with the situation,” the Wall Street Journal reports that the deal will be officially announced in the morning.
Of course, just because two of the most-hated cable and Internet providers in the country have agreed to get hitched doesn’t mean it will ultimately happen. The merger would need pass regulatory muster with both the Justice Dept.’s antitrust folks and the FCC.
Back in 2010, the regulators took a lot of heat when they signed off on Comcast’s acquisition of NBC, allowing the nation’s cable company to purchase one of its largest broadcasters and content producers.
Almost immediately following that approval, then-FCC commissioner Meredith Attwell Baker fled her government gig to accept a job… at Comcast, as Senior Vice President of Government Affairs.
In the years since, the FCC has been more skeptical of major mergers in already uncompetitive markets. First, both it and the DOJ shut down AT&T’s attempted acquisition of T-Mobile USA, and more recently has reportedly warned Sprint leadership that it probably wouldn’t approve that company’s planned bid to buy T-Mobile.
The big question is whether or not the regulators will view a Comcast/TWC merger as hurting competition.
On the one hand, it would mean the removal from the marketplace of the second-largest terrestrial cable provider (DirecTV has significantly more satellite TV subscribers, but does not really compete with TWC and Comcast for Internet service).
On the other side of the argument, there is little to no overlap of TWC and Comcast markets, as most consumers have no option to choose between the two providers for service. So it would mean that affected consumers would go from have no choice… to still having no choice.
One likely important factor that would not be as consumer-facing but would still have a huge impact on consumers is the leverage that a combined Comcast/TWC would have with regard to bandwidth. With the recent removal of net neutrality regulations, Internet service providers have the ability to charge whatever they want to — or to block or slow down traffic for — online content providers.
As part of the Comcast/NBC deal, the company agreed to abide by net neutrality rules through 2018, but after that it will be able to leverage its size and customer base to charge premiums to competing content providers like Netflix and Amazon while simultaneously giving priority access to its own content.
It will be months until the review process begins in earnest, but we’ll be keeping an eye on this story as it develops.
by Chris Morran via Consumerist