The Comcast Merger: What They’re Saying
The death isn’t official yet — Comcast is expected to announce today that it’s walking away from the merger with Time Warner Cable it has spent the last year pursuing — but the post-mortems are already being written. (Update: The company made it officials this morning: Merger’s off.)
The Wall Street Journal calls the broken deal a “black eye for Brian Roberts:”
Not only did Comcast stumble in judging the regulatory reaction to its now-failed effort to buy Time Warner Cable, the audaciousness of the bid rallied opponents of big media and played a key role in the Federal Communications Commission’s decision to impose tough regulations on the Internet.
“Comcast ended up with the worst of all possible worlds, a less attractive regulatory regime and no benefit in terms of a closed transaction,” said one media observer.
The company was also made out to be the poster child for bad customer relations during its pursuit of Time Warner Cable. That wasn’t helped by its own sales representatives who were embarrassingly caught on tapes that went viral badgering customers who wanted to drop their service.
But a second Journal article suggests the regulatory gauntlet is just too much for any company to survive:
Comcast Corp.’s soon-to-be abandoned plan to acquire Time Warner Cable Inc. ran up against the challenge of overcoming scrutiny by two federal agencies, including a Justice Department antitrust review that was more skeptical than some expected.
The challenge of prevailing on two regulatory fronts proved too much for Comcast, just as it did for AT&T Inc. in 2011 when it dropped its planned acquisition of rival T-Mobile USA. There, the Justice Department sued to block the deal and the FCC prepared to initiate separate proceedings before an administrative law judge.
TechCrunch says Comcast’s powerful lobbying arm fell short:
Comcast spent $4.62 million on lobbying in the first quarter of 2015, an increase of 50 percent from its spending in the same quarter last year. But now the cable giant is reportedly walking away with little to show.
Senator Al Franken, a strong opponent of the merger, said the company’s lobbyists are a known force on the Hill.
“If anything this might give them a false sense that this deal is going to happen because of their power, their presence on the Hill,” Franken said.
U.S. News says the end of the merger may signal changes that customers can enjoy:
Denying Comcast would discourage mergers in the rapidly consolidating telecom industry and spur businesses to find new ways to compete including appealing more to consumers with online video services, says Harold Feld, senior vice president at Public Knowledge telecom advocacy group.
Companies like CBS, HBO and most recently Dish Network have chosen to offer online programming not tied to cable or satellite television subscriptions from firms like Comcast, which charge customers for bundles of channels. Dish Network has also joined TheBlaze TV and the Consumer Federation of America to launch the Stop Mega Comcast coalition.
Networks have questioned whether to abandon the reliable profit of the cable business model by launching standalone online video services and sidestep payments for cable TV, but the FCC could inspire more defectors by blocking Comcast’s merger, Feld says.
There will, undoubtedly, be much more reaction to come.