Comcast-Time Warner merger in doubt

Author:
Publish date:
Image placeholder title

The proposed merger between media giants Comcast and Time Warner Cable appears to be in serious trouble.

A report from the Wall Street Journal says staff from the Federal Communications Commission are recommending the proposed $45 billion merger be sent to hearings, which the paper says is a "significant setback" for the deal.

The recommendation would basically put the decision in the hands of an administrative law judge. It's a strong signal that the FCC does not believe the deal is in the public interest, the Journal reported.

That comes on the heels of a Bloomberg report last week that said Justice Department staffers have also decided to recommend the deal be blocked, although that report hasn't been confirmed by other news sources.

Comcast, the nation's largest provider of cable TV and Internet service, wants to acquire Time Warner Cable, which is the second-largest. If the merger goes through, the company would control some 33 million video customers and 40 percent of U.S. broadband access, the New York Post reports.

U.S. Sen. Al Franken of Minnesota has been leading the fight against the merger ever since it was announced months ago, and he kept up the criticism in national media interviews on Wednesday.

Franken told NPR the combined company would wield far too much power in the marketplace.

"In my mind we need more competition in these spheres, not less," Franken said. "This would lead to higher prices and fewer choices, and if possible – if it is possible at all – even worse service from these companies."

On Tuesday, Franken and five other senators sent a letter to the FCC and the Justice Department, urging them to reject the merger.

Comcast executives met for several hours Wednesday with regulators from both the FCC and Justice Department, in their ongoing attempt to convince them the merger would be good for consumers.

That could mean they would need to agree to sell some of the cable and Internet properties they control, according to NPR.

As is typically the case with these kinds of proceedings, no information was made public about the nature of the discussions – from the regulators or the companies.

Comcast faces a few different options, depending on how the FCC and DOJ proceed with the merger request, according to CNN:

  • It could drop the merger plan altogether
  • It could negotiate a list of conditions that would make the deal acceptable
  • It could fight it out in court

CNN has an in-depth look at how all those options might play out.

Comcast has said it wants the merger to be approved by the summer. But any government challenge to it could go on for months, if not years.

Comcast is the primary cable TV provider in the Twin Cities metropolitan area.

In anticipation of the merger, Comcast announced in January that its Minneapolis customers would be sent to a new provider called GreatLand Connections, if city regulators approved.

Next Up

Related