The Wall Street Journal reports that FCC staff has recommended the Commission issue a “hearing designation order,” which would put the merger before an administrative law judge. In general, the FCC doesn’t order this sort of hearing unless it plans to actively oppose an acquisition because it doesn’t believe the combined companies would operate in the public interest.
Comcast would still have a chance to argue in favor of the deal, and would have the opportunity to continue making its pro-merger case to the FCC in advance of any hearing. But many companies will bail out of a merger when faced with a hearing designation. Just ask AT&T, which not only stepped away from the 2011 plan to acquire T-Mobile after opposition from the FCC and DOJ, but which had to pay T-Mo around $5 billion in cash and spectrum as a parting gift.
Fortunately for Comcast, it wouldn’t be on the hook if it walked away from the TWC deal. Just a lot of time and money spent on the process.
While neither Comcast nor TWC overlap in service areas, merger opponents argue it would still harm competition in the marketplace by consolidating so much of the nation’s pay-TV and broadband customers under one company. A combined Comcast/TWC would control nearly 1/3 of the U.S. pay-TV market and roughly 60% of the high-speed residential broadband business.
Comcast’s 2010 acquisition of NBC Universal heightens these concerns. Because Comcast now owns not only NBC but its many cable, movie, Internet, and syndicated video content companies, a number of people — including the Writers Guild of America — have expressed concern that Comcast would unfairly favor its own content to the detriment of the other studios and broadcasters that don’t have direct access to the cable and broadband lines for 30 million homes.
According to the Journal, today’s meeting between DOJ officials and Comcast execs involved the discussion of possible conditions that could be placed on the merger to allay antitrust concerns. However, the DOJ staffers are reportedly wary of trying to address these issues by asking Comcast to make promises about the way it would behave post-merger.
Additionally, because Comcast and Time Warner Cable have already made a deal to spin off around 4 million customers into a new pay-TV venture, GreatLand Connections, that would be partially controlled by Charter Communications (who is also swapping some markets as part of the deal), there may not be any other structural concessions that would make the deal more palatable.
by Chris Morran via Consumerist
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