Research Firm MoffettNathanson downgraded the probability of Comcast’s proposed merger with Time Warner Cable to 60%, citing a “tougher” regulatory environment. This comes amid the furor generated by the FCC’s proposed new net neutrality rules including Title II, as well as a controversial redefinition of “broadband” service, both of which were fiercely opposed by ISPs. With the chairman’s big reveal earlier this month, the FCC made it quite clear that despite being headed up by a former cable lobbyist, the organization was listening to loud consumer outcry rather than big cable’s lobbying campaign. MoffettNathanson joins other firms such as RBC Capital Markets and Oppenheimer in casting doubts that the merger will be approved.
Further fueling speculation that the merger will be frowned upon by regulators are a string of public customer service failures on the part of the cable giants. Everyone, from Comcast’s own leadership to cable industry lobbyists acknowledge that the incidents have been completely inappropriate. Consumer groups warn that a combined Comcast and Time Warner Cable would have even less incentive to improve customer service, and would continue to mistreat customers with relative impunity. Increasingly, regulators like the FCC seem to be listening to what these groups have to say. Being so consistently and unanimously disliked by customers may prove to be coming back to bite the TV providers.