Collapse of Comcast-Time Warner Merger Will Benefit Internet Users
NEWS ANALYSIS: The FCC used one of its silver bullets to kill a merger that many suspected would limit broadband users significantly.The collapse of the proposed merger between Comcast and Time Warner should have been a surprise to no one. This merger, if it had happened, would have put more than half the U.S. broadband industry into the hands of a single company. The deal's demise is not surprising, considering that the Federal Communications Commission and the Department of Justice had already killed several mergers, such as AT&T's attempt to merge with T-Mobile, that the agency felt would be bad for consumers. Nominally, the Comcast-Time Warner merger was a marriage of cable television companies, and if that were all that was at stake, it might have flown. But times change and this merger became more about broadband than about television. Broadband, as you, no doubt, know by now, is one of the FCC's hot buttons. Anything that the FCC sees as interfering with the free access to broadband is basically doomed. Looking at the FCC's history on broadband issues, ranging from net neutrality to local limits on broadband providers, this should have been clear to Comcast's lawyers. But for whatever reason, the parties involved went ahead with their merger plans and, in the process, spent millions of their stockholders' dollars in an effort that was pretty clearly in trouble from the start. Worse, it's pretty clear Comcast knew the merger was in trouble. How did Comcast know, you ask? Just look at the vast "better together" advertising campaign that's been going on for over a year. In fact, Comcast has been using its mandated net neutrality agreement that was a result of its merger with NBC as a selling point. Considering that this limitation was the only way that the FCC would agree to let Comcast buy NBC, the company should have realized that it was already pushing the limits.
This doesn't mean that the FCC has called a halt to cable mergers. What it really means is that the FCC, and to some extent the DOJ, are putting a stop on mergers that would result in a near-monopoly that could result in damage to the government's clear goal of a totally neutral Internet. There's every likelihood that Time Warner Cable will find another merger partner to help it recover from its financial problems.