Given that it hasn’t happened within the previously projected timeframe of ‘early 2015’, that headline is perhaps a bit obvious. But nevertheless, Comcast has officially pushed back the timeframe for closing the purchase of Time Warner Cable to ‘the middle of the year’.
A few weeks ago, the FCC paused its ‘shot clock’ as it continues to sift through all the data. Now, it’s not as if anyone really believes that the answer to their questions is contained within the mountains of documents they’ve requested to help them make their decision. The questions here are a bit more existential, and regulators are having trouble convincing themselves they can do whatever it is they think they should.
When two geographically distinct companies that basically don’t compete against each other merge, consumer choices aren’t directly affected (except in that their ability to use geography to escape their current provider is reduced). Yet the sheer size of the combined company that would result gives everyone the willies, because there are less direct effects that are harder to measure but which don’t add up to a coherent opposition. No matter how hard the FCC looks at the data, it’s not going to become clear just how the final result will play in the market, whether you are talking about buying power for programming, share of internet eyeballs, or congested peering points.
But perhaps it’s simpler than all that. One could argue that the Title II net neutrality push took all the regulatory mojo that FCC Chairman Tom Wheeler had for Q1. It’s possible that he knows what he’s going to do already, but simply needs to reload.
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Categories: Cable · Government Regulations · Mergers and Acquisitions
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Do you think there is a “Too Big to Fail” argument to all this for consumer broadband? Sure there is the phone companies but if Comcast went the way of the DoDo would the phone company be able to handle the influx of customers? I agree with the competition piece, who cares since the two companies don’t compete anyway. A too big to fail company is another problem we don’t want to repeat so it will involve regulation, Title 2 will take care of that but if it gets struck down in court we may have a problem.
Fail? They made $8.5B last year… But we’re talking about infrastructure here, infrastructure with cash flow. Should a company as big as Comcast/TWC get in enough trouble, restructuring would take care of it. We’ve had cable companies do that, Charter a few years back for example. It’s not a financial institution, where the assets it does business are volatile and more easily lost.
Honestly, the regulatory argument against the deal that has had the most traction with me is the concentration of buying power when dealing with other segments of the economy, i.e. content, internet traffic exchange, etc. Those are somewhat easier to regulate, so having Title 2 in place perhaps paves the way for the deal to go through.
Rob I am curious to know your opinion post merger close what comcast might do with navisite? its clear TWC bought to own assets but Comcast appears to have the exact opposite of the strategy since it has built network into 325 datacenters as a strategy. Do you think they keep it and monetize it? or do you think they get rid of it as part of the negotiations?
Great Question Grant. Monetize , definitely monetize all the way .
Wow, I have a stunt double?
I don’t disagree with my stunt double’s expectation of monetization, although I’m a bit more cautious. I don’t think the fate of Navisite is a big enough issue for Comcast to have decided yet what to do with it. It’s also possible they could keep it as an alternative and see what happens.
Seems to me with the pending switch to IPTV and companies like Apple and others jumping in big with there own offering with their own distribution agreements etc and only requiring a internet connection to serve millions the battle is for last mile internet speed not the content battles. MSO/RBOC and potentially Wireless not sure how a bigger company like a merged TWC/Comcast change the dynamic of that battle. The new race is for speed not content in my mind
Really?
Surprised it’s taking so long.