Comcast executives on Tuesday expressed confidence that their proposed merger with Time Warner Cable will be approved by federal regulators in “early 2015,” even as some industry analysts have expressed less confidence in the deal.
In its fourth-quarter earnings call with investment analysts, Comcast CEO Brian Robert said “we still think its approvable,” noting that the FCC has been occupied by its vote this week on new net neutrality rules. After the vote, Roberts said he believes the agency will be able to turn its focus back on the $45 billion merger of the nation’s two largest cable and Internet service providers.
With weeks left on the FCC’s 180-day “shot clock” for its merger review and reports of the Justice Department interviewing others in the industry about the merits and harms of combining Comcast with Time Warner Cable, some analysts say they are less confident the deal will be approved.
Strong earnings — particularly gains in revenues for its broadband business — show how dominant the company has become. In the fourth quarter, it added 375,000 broadband subscribers. In 2014, Comcast gained more than 1 million broadband subscribers.
If its merger is approved, Comcast and Time Warner Cable will, by some estimates, have as much as 50 percent of the high-speed Internet market.
“Surely it doesn’t help Comcast’s arguments in favor of their merger with Time Warner Cable that their broadband market share is galloping higher,” wrote Moffett Nathanson analyst Craig Moffett in a research note Tuesday morning.
Moffett has lowered the chances of Comcast’s merger approval from 70 percent to 60 percent. “We still believe the deal is more likely than not to be approved, but we are cutting our probability of approval.”
His comments were echoed by other analysts including Rich Greenfield at BTIG, who puts the prospects of a successful merger even lower, at 30 percent. In the New York Times, former FCC advisor Kevin Werbach said, “The prospects for the deal, while they’re still not bad, have continued to go down.”
In the earnings call, Roberts was asked if he would agree to strong net neutrality conditions on the merger that wouldn’t allow Comcast to challenge the FCC’s move to classify broadband as a Title 2 service, which comes with much more regulatory oversight.
“We do not want to be different than any other company in the industry,” Roberts said in the call. “The right place to have a review of broadband, even if we don’t agree with the outcome of the review in all cases, would be to affect all industries and providers so we are on a level playing field going forward.”