The Washington PostDemocracy Dies in Darkness

A lot of people don’t like the Comcast-Time Warner merger, but that doesn’t mean it won’t be approved

Federal Communications Commission Chairman Tom Wheeler testifies during a hearing on Capitol Hill in Washington before the House Energy and Commerce Committee.  (AP Photo/Susan Walsh, File)
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The people have spoken about Comcast's bid for Time Warner Cable, and thousands are concerned that the merger could squash competition and harm consumers. But that doesn't mean regulators won't approve the $45 billion deal, some analysts say.

Sure, there are concerns that a more powerful cable and broadband provider could bully its way to lower fees to license content from television and movie studios. The fact that Comcast runs regional sports networks could also make it harder for other cable and satellite providers to get access to those shows, some say. And WeatherNation, a TV and online competitor to Comcast's Weather Channel, said it would be hard to compete against its bigger rival, which also provides crucial weather data to its competitors, according to The Post's Jason Samenow. Netflix has led criticism that Comcast could unfairly charge firms extra for the guarantee that videos would stream to Comcast customers without buffering.

When it comes to approval of the merger, regulators may not like how big the resulting company would be, but they may find that competition won't necessarily be reduced, because the companies operate in separate markets, Paul De Sa, a analyst at Bernstein Research wrote in a research note Tuesday.

"As no commenter has made the case that Comcast and TWC compete against each other in any major market . . .  we believe it is unlikely that the DOJ (or States) would succeed in blocking the merger in Court for violating antitrust laws, and it is improbable that the FCC alone would prevent the transaction from closing by referring it to a hearing on non-antitrust "public interest" grounds," De Sa wrote.

Telecom and media analyst Craig Moffett of Moffett Nathanson research gives the deal an 80 percent chance of approval, calling it "very likely" but not certain.

"This transaction was inevitably going to elicit strong reactions," Moffett wrote in an email exchange Wednesday. "But it is hard to argue that any of the arguments are entirely new, and therefore it is not clear that there is any reason to assign any different probability to its approval than what we had assigned when it was first announced."

When the merger was first proposed last February, some analysts said the bold move to combine such big companies in the telecommunications space would face public and political criticism. And it has. The companies' legendary poor customer service rankings have raised calls for the merger to be blocked because the deal would reward some of the nation's most unpopular firms. As columnist Catherine Rampell asked: "Can we block a merger just because two companies are jerks?"

The FCC, which will review the merger on public interest grounds, may use conditions as a way to create policies without creating formal rules, says Paul Gallant, managing director of telecom research at Guggenheim Partners.

“I still suspect the merger will be approved. It doesn’t seem to trip any antitrust wires, and merger conditions would let the FCC push various Internet policies it cares about,"  Gallant said. "But I also think the companies’ national reach in broadband is making this a closer call than Comcast-NBCU was four years ago.”

The first round of public comments ended last week at the FCC with 75,671 submissions. There are two more periods for public comments. It's just 54 days into a 180-day review period at the Federal Communications Commission, which means a final decision will likely be announced in the first quarter of next year. Chicago Mayor Rahm Emanuel and 80 local Chambers of Commerce have supported the deal. Many diversity groups also like the deal, lauding Comcast for its low-income broadband program called Internet Essentials. Brendan Sasso of The National Journal notes that The United Way and Boys & Girls Club are among groups that support the merger but have also received generous donations from the company.

And there are numerous individual comments from consumers like Patrick Sprunger of Fort Wayne, Ind.:

"I believe the agreement or merger between Time Warner and Comcast would have an adverse effect on the prices and trade of entertainment in the United States. We
are see a concentration of control in the source, control and distribution of entertainment which leads to lack of choice when it comes to price and service in the industry. I would ask that you not approve this agreement/merger. Thank you for listening."

Comcast executive vice president David Cohen said he's sure their voluntary commitments to the FCC and Justice Department will address concerns by critics.

He has said concerns by many commenters are not related to the actual merger and should be addressed outside the review of the merger.

"As we’ve said from the outset, we believe this is an approvable transaction and we expect to agree with regulators on conditions that will further enhance the public interest while not being unduly burdensome on our business or consumers," Cohen said in a statement. "We stand ready, willing, and able to address any legitimate concerns that are specifically related to the issues raised by our transactions and look forward to working productively and constructively with the FCC in the transaction review process.”