Comcast Drops $45B Bid to Merge With Time Warner Cable

By Todd R. Weiss  |  Posted 2015-04-24 Print this article Print
Comcast, Time Warner Cable, merger, broadband

The ending of the merger proposal also brings a halt to a related proposal that would have divested some 30 percent of Time Warner Cable's subscribers to rival cable company Charter Communications in an effort that was aimed at winning over regulators. That idea was raised in April 2014 to try to help the merger gain more support, according to an earlier eWEEK story. Charter had earlier lost its own bid for Time Warner Cable to Comcast's effort.

Several industry analysts told eWEEK that the ending of the merger attempt was not a surprise.

"It looks like they felt that the deal couldn't stand the sunlight of an FCC hearing and investigation," said Charles King, president and principal analyst of Pund-IT. "Given the weakened state of the cable business and the growing range of entertainment options available to consumers, it was probably wise, though you have to wonder why the companies attempted to pursue such a flawed venture in the first place. In any case, to quote one of TWC's most beloved cartoon characters, Porky Pig, 'Th-th-th, that's all folks.'"

Rob Enderle, president and principal analyst of Enderle Group, said the collapse of the merger "is the cost of not maintaining good customer satisfaction," which has been a longtime criticism of both Comcast and Time Warner Cable among the general public. "The only firm with worse customer satisfaction in this space than Time Warner is Comcast, and both are huge so that set the foundation for significant opposition to this deal."

Had Comcast had a reputation for great customer satisfaction before the merger proposal, the company would have had support for the deal "because it would have fixed Time Warner, but the combination of making this a near national monopoly and [making] already upset customers even more upset was a deal breaker," said Enderle. "Even Consumer Reports aggressively came out against this.  If they want to do anything of this scale, they have to fix customer satisfaction."

Additional pressures from groups like the Online Trust Alliance and from Google moving into providing network connectivity will also have continuing impacts that both cable companies should keep in mind if they ever get merger itches again, said Enderle. "If both firms don't fix their customer satisfaction problem, they'll likely be gone by the end of the decade."

Angie Kronenberg, chief advocate and general counsel of COMPTEL, a trade association for competitive networks and competitive communications policy, told eWEEK in a statement that her group also lauds the ending of the merger proposal.

"Today is a huge victory for consumers and competition," said Kronenberg. "COMPTEL commends the Department of Justice and Federal Communications Commission for their work on this merger, and we urge them to release their analyses so that all interested parties and the public will fully benefit from the year-long review of the merger."



Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel