A hearing suggests that the FCC believes that the proposed merger is in conflict with the public interest, and is unlikely to result in approval.
According to the Wall Street Journal, the FCC plans to recommend a hearing on the proposed marriage of cable giants Comcast and Time Warner. This move is widely seen as final blow for merger hopes that have been steadily deflating since regulator announced plans for stricter net neutrality regulations. Recently, reports suggested that the DOJ was leaning towards blocking the deal, sending Comcast execs scrambling to the negotiating table to try and keep their takeover of Time Warner Cable alive.
A hearing before an administrative law judge suggests that the FCC opposes the merger. While the hearing does give Comcast and Time Warner Cable the opportunity to defend the controversial merger, the move is largely a poison pill intended to quash the deal. Considering the cable companies’ checkered reputations, there’s virtually no chance that they’d emerge from the hearing with the FCC’s blessing. Along with reports that the Department of Justice is also against the deal, the mega-merger appears to be dead in the water. Critics of the deal have also emerged in the US Senate, who despite lacking a say in the regulators’ approval decision, have become the latest high profile opponents of the big cable tie-up. Whether the merger is rejected by a regulator, or either Comcast or Time Warner Cable decides to walk away from the deal, neither company will be forced to pay a breakup fee as is sometimes the case with big corporate mergers.
While the Comcast/Time Warner Cable merger may be off the table, other mergers in the pay-TV industry remain on the radar. AT&T’s proposed acquisition of satellite TV operator DirecTV will be the next to go before regulators, followed by Charter Communications and their bid for Bright House Networks, a smaller merger that could be disrupted by the fallout from the failed Comcast deal. Time Warner Cable could decide to bid for Bright House Networks itself. Charter has reportedly also expressed interest in merging with Time Warner Cable in the event that the Comcast deal fell through.