Lawyers in the Department of Justice’s antitrust division will reportedly recommend the agency block Comcast’s merger with Time Warner Cable and could make their determination public next week.
Concerns that the cable and high speed internet juggernaut would, ultimately, have a negative impact on consumers is what’s driving the report — specifically,the control the combined companies will have over broadband internet, exclusive cable deals it could enter into to keep content off of other platforms and limits it could impose on programming delivered through streaming services.
According to Bloomberg, the number of organizations and people who were against the merger weighed heavily on the lawyers, as did the fact that both companies consistently received low marks for their service. The combined company will control 56.8 percent of homes with internet connections above 25 Mbps, which the government defined as “high speed”. It would also have about 29 million residential video customers, or 29 percent of cable TV sucscribers.
The negative recommendation is a blow, but’s not the final word on the matter. Renata Hesse, a deputy assistant attorney general for antitrust division, and other heads of the division will ultimately rule on the matter. (The head of the antitrust division, Bill Baer, is being kept out of the matter because he represented NBCUniversal when Comcast acquired it.)
Other signs that don’t bode well for the merger: the deal also has to have the approval of the Federal Communications Commission, but it has not weighed in on the matter. The FCC previously delayed review of the merger because the lawyers of both companies were late in turning over documents. Comcast has threatened to mire the commission’s recent ruling on net neutrality in lawsuits. However, some have speculated that the FCC is waiting to see the kind of information content providers will disclose in their contracts with Comcast and Time Warner before weighing in.
Comcast could take the case to court and attempt to reach a settlement that would allow the deal to go through. But regulators have not talked with the company with regards to resolving their concerns, which would include possibly selling parts of its business and addressing how it does business.
If the deal does not go through, it could have repercussions beyond the two companies — repercussions that are not unlike something out of Game of Thrones. Comcast is selling some of its territories to No. 4 Charter Communications in an attempt to put fears at rest about its control of the cable and internet industries. However, the success of the merger is a condition of those sales.
Charter has also attempted to buy Time Warner. Charter bought Bright House Networks (No. 6), though Time Warner has an existing agreement to negotiate programming for Bright House and may buy the company to keep Charter from attempting another takeover.
Is winter coming for the cable/broadband internet industry? We’ll find out next week.