- The Washington Times - Thursday, April 23, 2015

One of the biggest media mergers ever appears on the brink of cancellation as cable giant Comcast Corp. has reportedly pulled the plug on a $45 billion takeover of rival Time Warner Cable Inc. in the face of rising resistance from the Obama administration to the deal.

The formal cancellation of the deal could come as soon as Friday, Bloomberg Business and the New York Times reported Thursday afternoon.

The writing may have been on the wall for the deal’s demise after the Federal Communications Commission, which must approve the merger, recommended a formal hearing on the deal because of antitrust concerns. Industry analysts said convening such hearings is typically a sign of serious reservations from regulators about the deal.

A similar hearing was scheduled for the proposed 2011 merger bid between AT&T and T-Mobile USA, a factor in the collapse of that deal as well.

Comcast is the world’s largest broadcasting and cable company in the world. The Time Warner deal would have expanded its cable and broadband reach and given Comcast access to Time Warner’s programming through HBO and other outlets.

The deal was first announced in February 2014 and has already been approved by shareholders of both companies.

The news that the deal may be canceled broke shortly before the markets closed, but came amid growing signs in recent days that the deal might not pass regulatory muster. The shares of both companies were up modestly for the day, with Comcast rising 54 cents (0.92 percent) to $59.30 and Time Warner up 42 cents (0.50 percent) to close at $84.88.

Justice Department officials announced a preliminary study of the antitrust implications of the proposed merger within weeks after it was announced last year. Officials of the two companies met this week with officials from the Justice Department and the FCC to defend the deal, but declined to comment on what was said.

Comcast controls about 22 percent of the U.S. video market and Time Warner has about an 11 percent share. The companies said a merger was attractive because there was very little geographic overlap in the markets they serve. The two firms have also launched a high-profile lobbying blitz in a bid to secure approval of the deal.

But six senators — five liberal Democrats and independent Sen. Bernie Sanders of Vermont — sent a letter to Attorney General Eric Holder Jr. and FCC Chairman Tom Wheeler this week sharply opposing the merger.

“With 57 percent of the broadband Internet market and 30 percent of the cable market, [Comcast-Time Warner] would have an ability to defeat competing TV and Internet companies and stifle American innovation across the industry,” the lawmakers warned.

Neither company was commenting Thursday on the fate of the deal or any plans to drop the merger. A recent blog post on the Time Warner website strongly defended the community impact of the deal, saying critics were misstating the combined company’s plans.

And not everyone was convinced that Comcast was ready to surrender.

Analyst Craig Moffett, of MoffettNathanson, said in a blog post late Thursday that the deal “isn’t dead yet.”

But, he added, “it’s a bit like an elephant that has been dropped out of an airplane. At around 10,000 feet, it is technically still alive. But it is falling fast … and its odds of survival are pretty low when it hits the ground.”

But even if the companies could eventually secure approval from the federal government, the process promised to be long and drawn out, and could require further concessions to satisfy regulatory concerns.

“I don’t think [Comcast] is going to go through a multiyear process to fight the government,” Richard Greenfield, a media analyst with BTIG in New York, told USA Today.


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