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Amid Widespread Opposition and Regulatory Scrutiny, Comcast-Time Warner Cable Merger Lingers

Nearly a year after it was first agreed upon, a proposed merger of Comcast and Time Warner Cable (TWC) remains clouded with uncertainty. Like an overzealous bride and groom awaiting a conspicuously tardy priest at the alter, Comcast and TWC executives must receive the blessing of government officials in order to officially consummate the $45.2 billion transaction.1  If approved, Comcast’s acquisition of TWC brings together the country’s two largest cable and home Internet providers, effectively yielding a super-conglomerate that would be responsible for servicing half of all paying cable-TV-phone customers in the United States.2

Put simply, it’s one great white shark swallowing another, a move that has drawn the ire of the American public for its aggressive, monopolistic nature. According to a Reuters poll, more than half of Americans surveyed viewed the merger as being detrimental to market competition and consumer wellbeing.3 Meanwhile a boisterous group of nonprofit consumer advocates, rival cable companies, and Washington D.C. lawmakers has voiced concerns to the Senate Judiciary Committee about the proposed deal’s stifling effect on the TV and Internet industries.4 In examining the deal, officials at the Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ) must assess whether Comcast’s acquisition would afford the company too much power over Internet and cable traffic. This, in essence, is the overwhelming rallying cry of those in opposition – the emergence of a company with “inordinate market power” throughout all sectors of the broader multimedia space.5 Some have gone as far to say that Comcast would emerge from the acquisition with “unprecedented control over the Internet.”6 What’s more, both consumers and analysts fear that regulatory approval of the Comcast-TWC merger could spark a frenzy of consolidation in the telecom industry, thus severely limiting the number of options available to consumers in selecting a service provider.7

While Comcast representatives acknowledge the lingering uncertainty of the deal passing regulatory muster, the media giant argues that its acquisition of TWC would not threaten market competition, especially given the lack of any direct competition between the two companies.8 The various service offerings of each company only overlap in a small amount of markets – only 2,800 of the combined companies’ 30 million customers.9 Thus a merger of Comcast and TWC, the companies argue, will not significantly reduce the number of options available to consumers in the video and broadband marketplace.10 Instead, the parties to the merger see the transaction as plentiful of benefits for consumers, as a larger Comcast will be able to provide faster broadband speeds, increase investments in on-demand video services, and otherwise attend to the needs of the average customer more effectively.11

Still, in an effort to appease members of the FCC and DOJ, Comcast executives have been keeping regulators apprised of information regarding business operations and the company’s plans for the integration of TWC. In short, Comcast hopes to make the decision easy for regulators and minimize any demands that the FCC might have for the transaction. For example, the media giant has recently begun efforts to divest nearly four million subscribers.12 In selling away these customers to another competitor, Charter, Comcast will strengthen its argument against assertions of it being a monopolistic conglomerate.

To be certain, the merger is no longer the smooth-sailing inevitability it once was in the eyes of Wall Street analysts. Instead, Comcast’s proposed acquisition of TWC is poised to undergo an extensively thorough review that is expected to be a “bruising battle with the deals opponents.”13

For now, the process appears too hard to handicap, as the TV and Internet landscape seems prone to dramatic change. Growing market competition might have a large impact on how the FCC ultimately rules. Whatever the outcome, it will nonetheless have dramatic, industry-wide implications.

  1. Rupert Neate and Dominic Rushe, Comcast announces $45.2bn takeover of Time Warner Cable, The Guardian (Feb. 11, 2014, 11:08 AM), 

  2. Brian Barrett, Why the Comcast-Time Warner Cable Merger Is Even Worse Than You Think, Gizmodo (Feb. 13, 2014, 10:36 AM), 

  3. David Ingram, Americans take dim view of Comcast, Time Warner Cable deal, Reuters (Mar. 26, 2014, 1:04 AM), 

  4. Edward Wyatt and Eric Lipton, Comcast Gears Up to Persuade Regulators, N.Y. Times (April 8, 2014), 

  5. Id

  6. Id

  7. Tom Risen, Comcast Merger Rejection Could Doom Cable TV, U.S. News (Feb. 13, 2015, 11:57 AM), 

  8. Id

  9. Wyatt and Lipton, supra note 4. 

  10. Id

  11. Id

  12. David Gelles, Comcast Seeks to Divest Subscribers to Win Approval for Time Warner Cable Deal, N.Y. Times (April 22, 2014, 6:02 PM), 

  13. Wyatt and Lipton, supra note 4.