Comcast Gives Up on TWC Merger

COMCAST GIVES UP ON TWC MERGER

It was to have been the biggest media merger of all time. Had it gone into effect, the deal would have combined the largest and second-largest cable TV and internet  systems in the United States,  and the resulting behemoth would have had more than thirty million subscribers. The proposed merger, though, is now officially dead.

On Friday, April 25, Comcast announced that it would abandon its effort to acquire Time Warner Cable. Last year, Comcast offered $42.5 billion for TWC, and the TWC board of directors accepted the offer. Many consumer organizations objected to the merger, saying that it would reduce competition in the pay TV and internet markets, and that customer service would suffer. Many critics noted that Comcast and TWC are consistently ranked among the lowest of all cable or satellite system operators for customer service.

Any such media mergers are subject to approval by the Federal Communications Commission and the Justice Department. For this deal, the FCC review process took an unusually long time. The commission announced in March, as the initial deadline for completion of its review was approaching, that it would extend the deadline indefinitely. Within the last week, though, teh FCC said that it would refer the matter to an administrative law judge. Such referrals usually mean the FCC believes the merger would not serve the public interest.

Sensing that federal approval of the merger was highly unlikely, Comcast announced last Friday that it would abandon the deal.

Charter Communications is likely to renew its own bid for TWC. Charter had offered to buy TWC two months before Comcast did. TWC shareholders rejected Charter’s offer, though, saying that the bid price was too low.

TWC may put in its own bid for Bright House Networks, the sixth-largest cable system operator in the United States.

The failure of the Comcast-TWC merger is likely to help the competition, especially internet video streaming video operations such as Amazon, Hulu, Netflix, and Dish Network’s stand-alone streaming platform, Sling TV.

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