Comcast has filed its public interest statement with the Federal Communications Commission (FCC) today for its US$45.2bn acquisition of Time Warner Cable (TWC).
The deal will see America’s two largest cable operators merge, however in the filing…
Comcast has filed its public interest statement with the Federal Communications Commission (FCC) today for its US$45.2bn acquisition of Time Warner Cable (TWC).
The deal will see America’s two largest cable operators merge, however in the filing Comcast reiterated its argument in favour of the deal, saying that the companies don’t compete against each other in any markets.
Comcast has told the FCC that the deal will benefit consumers because the scale created by the merger “will accelerate investments in R&D, innovation, and infrastructure”.
One of the advantages of a deal would be faster broadband, the company said, yet it is internet access which has emerged as the biggest issue for critics of the merger.
Comcast built remedies into the transaction to divest three million TWC subscribers so as to keep its share of the multichannel video market below 30% – a level which the FCC has been comfortable with in the past.
However, its pay-TV rivals such as DTH providers Dish Network and DirecTV do not provide broadband. Consumer interest group Public Knowledge estimates that a combined Comcast-TWC would control nearly 50% of high-speed Internet access.
“This unprecedented degree of control over a critical resource for innovation by a single company is reason enough to block the transaction,” Public Knowledge said in a statement today.
Tomorrow the Senate Judiciary Committee will grill Comcast EVP David Cohen and Time Warner Cable EVP Arthur Minson on the deal.
One of the witnesses being called before the committee will be Gene Kimmelman, head of Public Knowledge.
Last week Comcast filed its Hart-Scott-Rodino notification with the Department of Justice for antitrust clearance. In February, Cohen said that a nine to 12 month regulatory review was realistic, although some have suggested the process may last longer.
Any regulatory issues the deal comes up against will be music to the ears of Charter Communications, which lost out to Comcast in the race to buy TWC.
Charter has subsequently launched a proxy war against the Comcast-TWC merger and may look to jump in if the deal faces significant issues.
In spite of the regulatory risk surrounding the deal, a break-up fee was not included in the merger agreement – Charter has criticised TWC’s management for not insisting on one.
