By Wes Smith
In a major win for consumer advocacy groups, Comcast has rescinded its $45 billion merger bid for Time Warner Cable.
After facing intense scrutiny from both the U.S. Justice Department and the Federal Communications Commission, multiple outlets are reporting that the cable giant will not go forward in its plans to merge the two largest cable providers.
If the deal had been approved, the new company would have controlled about 57 percent of the U.S. broadband market and roughly 30 percent of the pay television market. The companies already negotiate deals to restrict competition to cable access in individual markets, limiting most consumers to one cable company.
Almost from the moment the proposed merger was announced in early 2014, it was met with harsh criticism from lawyers, consumer groups, and even representatives in Congress like Senator Al Franken (D-MN).
“My fear has been more and more concentration of power, and that is why I have been against this,” said Sen. Franken. “We need more competition in this space, not less.”
Opponents were no less bolstered by public perception of the companies. Both Comcast and Time Warner Cable consistently rank not just among the lowest of cable providers, but of any companies providing customer service in annual satisfaction surveys.
According to the New York Times, the companies plan to formally announce the decision on Friday, and neither company would respond for immediate comment.
Earlier this week, the companies met with the regulators in charge of approving any merger between the two companies: the U.S. Justice Department and the F.C.C. The meetings from Comcast CEO Brian L. Roberts were to make a final pitch as to why the merger would be good for consumers.
The meetings apparently faced push-back from F.C.C. Chairman Tom Wheeler, who has taken a sharp stance against cable providers after opening Net Neutrality propositions to public comment last year. Those comments eventually lead to a reclassification of broadband providers as Title II earlier this year. After the meetings, F.C.C. general counsel Jonathan Sallet was said to recommend referring the cable merger proposal to a hearing before an administrative judge, a sign of an almost certain block from the agency.
Christopher Jon Sprigman, a former Justice Department antitrust official, told the New York Times that officials in the department concluded that the details of the Comcast-TWC merger could not be fixed simply by asking Comcast to make a few changes.
” [They are] not confident in its ability to restrain Comcast with conduct remedies,” he said about possible concessions by Comcast to win approval. “They are too powerful and they had shown before they don’t respect them very much.”
The failed merger also affects several other deals in the works, mostly dealing with Charter Communications, who has aggressively pursued Time Warner Cable before. Charter had multiple deals in the works that were contingent on Comcast acquiring TWC. They had planned to take over TWC markets Comcast would have needed to divest.