Given a shared history of treating subscribers like ATMs and of taking the “do the least” approach to customer service, it almost made sense last month when the merger rumor mill went into overdrive with reports that Comcast was looking to acquire Time Warner Cable. But the odds of this marriage being blessed by regulators seem pretty slim.
FCC Commissioner Ajit Pai, who was not a member of the Commission when it idiotically approved Comcast’s purchase of NBC, tells the Wall Street Journal that it’s unlikely a merger between the two largest terrestrial cable and Internet service providers in the country would be approved.
“The Obama administration has applied greater scrutiny to proposed mergers and acquisitions,” he explained. “Precedents like this suggest an outright acquisition by Comcast of Time Warner Cable could face a number of hurdles in the Obama administration… A Republican administration likely would be more inclined to approve a deal.”
Any merger involving two cable companies of this size would require the go-ahead from both the FCC and the Justice Department, which would consider the antitrust implications of such massive consolidation.
Both agencies were heavily criticized for signing off on the deal that allowed Comcast to purchase one of the nation’s largest broadcasters, especially when one of the Commissioners who had championed the deal later left her post to cash in as the company’s Senior VP of Government Affairs. Following that PR debacle, both the FCC and DOJ put up roadblocks to the attempted AT&T/T-Mobile merger, which eventually collapsed, and whose failure has resulted in increased competition.
A combined Comcast/TWC would end up with around 33% of the country’s pay-TV market, according to some estimates. It would control an even larger portion of the high-speed Internet market.
One could argue that a merged TWC and Comcast would not actually have any notable impact on competition in the cable marketplace, as there is already virtually no competition in the terrestrial cable business. Unless they switch to satellite or have the option of a competing fiber network, most consumers’ cable company choice is determined by their address. Of course, those who choose satellite will still likely need the cable provider if they want to get broadband service for their homes.