Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Will Comcast Get Federal OK To Buy Time Warner?

(We put a new top on this story at 9:25 a.m. ET and added an update at 10:15 a.m. ET.)

As NPR's David Folkenflik pointed out earlier today, Comcast's proposed $45 billion purchase of fellow cable company Time Warner will receive some scrutiny from federal officials. Here's some more about that part of the story:

Politico writes that:

"The acquisition will be subject to government approval — and it is already raising concerns in the industry. The deal would combine two of the top four pay-TV companies in the marketplace.

"Free Press President and CEO Craig Aaron said the deal combining the two would mean higher prices. 'In an already uncompetitive market with high prices that keep going up and up, a merger of the two biggest cable companies should be unthinkable,' he said. 'This deal would be a disaster for consumers and must be stopped.'

"The Justice Department or the Federal Trade Commission will examine the deal for antitrust concerns, and the Federal Communications Commission will decide if the merger is in the public interest. ...

"Recent deals have been rejected by the federal government. The Justice Department and the FCC said no to AT&T's attempt to take over T-Mobile — a deal that would have combined the number two and number four wireless operators."

As The Wall Street Journal notes, Comcast has clearly anticipated that there would be some pushback:

"To reduce competitive concerns, Comcast is prepared to divest systems serving about 3 million managed subscribers and will, through the acquisition and management of Time Warner Cable systems, net about 8 million managed subscribers in this transaction."

Reuters adds that "the new partners are concentrated in different cities. Comcast would fill in its New Jersey and Connecticut portfolio with Time Warner Cable's New York City customers, for instance, and add major markets such as Los Angeles and Dallas. 'Comcast and Time Warner Cable don't compete and Comcast can easily divest a few million subscribers,' said BTIG analyst Rich Greenfield.

Update at 10:15 a.m. ET. "Fierce Debate" Expected:

The deal "is sure to spark fierce debate on everything from cable prices to net neutrality in the coming months, and regulators' ultimate view of the transition is difficult to predict," the Journal now adds. "The proposed alliance of the nation's two biggest cable companies carries a plethora of unknowns into the regulatory debate, lending hope to both supporters and foes. Observers expect an all-out lobbying blitz both for and against the deal."

Our original post — Comcast Confirms Deal To Buy Time Warner For $45 Billion — picks up the story:

Comcast, as we reported earlier, wants to buy Time Warner Cable for about $45 billion. The deal, which Comcast confirmed this morning, would bring together the nation's No. 1 (Comcast) and No. 2 (Time Warner) cable companies.

NPR's David Folkenflik filed this report for our Newscast Desk:

"If the deal goes through, Comcast will serve about 30 million American households in cable TV alone.

"The news was broken by a reporter for one of Comcast's many television properties — CNBC. Comcast also owns NBC and Universal studios. The purchase would stave off a lesser bid for Time Warner by a smaller rival, Charter, and it would give Comcast more leverage when it negotiates with the parent companies of such major cable channels as Fox News and ESPN over how much to pay to carry their programming.

"Federal anti-trust lawyers at the Justice Department are likely to review the deal, which would mean fewer players competing to win cable franchises from regional and local governments.

"Time Warner Cable itself is a remnant of an even larger megadeal — the creation of AOL Time Warner — now considered one of the worst mergers in U.S. history."

USA Today looks at the pending deal and concludes that the companies are "a good fit":

"The deal makes sense for shareholders because Comcast's price would ... be a premium over the company's current market value by about 18%, based on TWC's Wednesday closing price of $135.31.

"And the acquisition also is a better fit personnel-wise as Comcast CEO Brian Roberts and Time Warner Cable CEO Rob Marcus are friends. The two companies had already joined forces in August 2013 in a joint venture on improved set-top boxes.

"For customers, there's a potential for improved service, too. Comcast has spent billions on new high-tech Xfinity set-top boxes and 'TV Everywhere' services."

For its part, Comcast boasts that:

"Through this merger, more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi. The transaction also will generate significant cost savings and other efficiencies."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Mark Memmott is NPR's supervising senior editor for Standards & Practices. In that role, he's a resource for NPR's journalists – helping them raise the right questions as they do their work and uphold the organization's standards.