Moneybox

FCC Recommends a Potentially Deal-Killing Hearing for Comcast–Time Warner Merger

David Cohen, executive vice president of Comcast, and Robert Marcus, CEO of Time Warner Cable, attend a hearing on their proposed merger in May 2014.
David Cohen, executive vice president of Comcast, and Robert Marcus, CEO of Time Warner Cable, attend a hearing on their proposed merger in May 2014.

Photo by Drew Angerer/Getty Images

The Federal Communications Commission has recommended that the proposed $45.2 billion Comcast–Time Warner Cable merger head to a hearing, the Wall Street Journal reports, citing “people familiar with the matter.” What does that mean for the deal? Robert McDowell, a former Republican commissioner of the FCC, told the Journal over the weekend that “mergers are never put to hearing in order to approve them … they are designated for a hearing in order to kill them.” Here’s more from the latest Journal report:

The [FCC] staff reached a conclusion that the best option for the FCC is to issue a “hearing designation order.” In effect, that would put the merger in the hands of an administrative law judge, and would be seen as a strong sign the FCC doesn’t believe the deal is in the public interest.

A merger of Comcast and Time Warner Cable, the No. 1 and No. 2 biggest cable operators in the U.S., respectively, would create a cable and Internet behemoth serving roughly 30 million customers. Right now, Comcast has nearly 22 million high-speed Internet users and slightly more video subscribers. The resulting Super Comcast would control approximately 30 percent of the market for pay TV (i.e. your traditional channel bundles) and 57 percent of the market for broadband.

Comcast was scheduled to meet with officials from the Justice Department on Wednesday to discuss the proposed merger. Late last week, Bloomberg reported that lawyers at the DOJ were getting ready to recommend blocking the deal on antitrust concerns. Comcast, for its part, has maintained that the merger isn’t anti-competitive and will “bring substantial benefits to consumers.” For more on who you should believe about that, see Slate’s Comcast-TWC explainer.