Comcast execs plan to meet with Department of Justice officials in order to salvage the merger.
According to Bloomberg, Department of Justice officials reviewing the Comcast Time Warner Cable merger deal are on the verge of recommending that the deal be blocked. Reports also suggested that the DOJ was not in the process of negotiating with Comcast, perhaps indicating that no concessions or conditions would be able to save the deal. None the less, Comcast executives plan to meet with DOJ officials on Wednesday in hopes of finding solutions to their concerns, enabling the deal to go forward. Should the merger ultimately be rejected by regulators, neither Comcast nor Time Warner Cable will face a breakup fee, meaning both companies will go their separate ways having gained nothing from this more than one-year-long process.
In addition to rumors of the DOJ leaning against the deal, Comcast’s hopes aren’t looking much better with the other regulator that must approve their merger: the Federal Communications Commission. The FCC is reportedly mulling whether to hold a hearing on the two cable giants’ marriage. While a hearing is never a good sign for a potential merger, it could be particularly bad for Comcast, a company with no shortage of detractors or faults.
Since regulators began scrutinizing the potential marriage of the nation’s two largest cable companies, there have been no shortage of critics lining up to speak out against the deal. While Comcast has been engaged in an intensive lobbying campaign, public opinion has turned against the cable giant as opponents sound the alarm. The anti-Comcast camp has had plenty of ammunition, citing a long history of anti-competitive behavior and a poor reputation with customers. Making matters worse, Comcast has been suffering from an ongoing string of embarrassing customer service incidents, involving recorded calls with unhelpful Comcast representatives, billing disputes playing out in local news media, and expletives replacing names on customers’ bills. As public resentment of Comcast grows, it gets harder and harder for government regulators to approve a deal of this size that would give the oft-maligned company so much power.
Should the deal fall through, its effects will be felt throughout the cable industry. In particular, the third largest cable company in the nation, Charter Communications, could become a new suitor for Time Warner Cable. Time Warner Cable could also become a competitor in Charter’s bid to purchase Bright House Networks. Another pay-TV merger, between AT&T and satellite provider DirecTV, would also be cast into doubt by face renewed uncertainty, risking the same regulatory rejection as Comcast and Time Warner Cable.