Among other things, regulators need to make sure that the merger doesn’t violate anti-trust laws and create a monopoly. Since Comcast is the number one cable provider, and Time Warner is number two, the companies need to get a blessing from the Department of Justice and the Federal Communications Commission.
For the most part Wall Street analysts think the deal will go through. There is one snag, according to Nomura analysts Adam Ilkowitz and Donald Chen.
It’s not about the fact that the companies will, together, control 29% of cable market share. It’s that once they do, they’ll be in the bulk of the markets. They’ll also own a huge content provider, NBC Universal. Comcast bought NBCU back in 2010.
“We don’t think the regulators (FCC, DOJ) will quibble with 29% video market share,but we think the pro forma company covering an estimated 66% of homes passed could present a problem,” the analysts write. “Coupled with the vertical integration with NBCU, there may become a need for concessions around carriage of competing channels. We note the NBCU/CMCSA consent decree is being challenged by Bloomberg, and this may need to be solved as well.”
In other words, regulators may not want this massive TV distributor to favour the content it owns. It’s unfair to other content providers.
That could be what gets everyone fighting in Washington.