America’s largest and second-largest cable companies may not be allowed to unite, after all.
Bloomberg is reporting that US antitrust lawyers are ready to try blocking the planned merger of Comcast and Time Warner Cable, which was announced more than a year ago but has been held up by a prolonged regulatory review. The concern is that “consumers would be harmed” by the combination of the two companies, according to Bloomberg.
The deal has always been contentious, and needs to be approved by multiple government agencies, including the Federal Communications Commission, which was also said to be skeptical and paused its review, for the second time, last month. The US would still need to file a lawsuit to block the deal, and lobbying is sure to intensify until that point.
In an statement emailed to Quartz reacting to the news, Comcast said:
The Comcast/Time Warner Cable transaction will result in significant consumer benefits – faster broadband speeds, access to a superior video experience, and more competition in business services resulting in billions of dollars of cost savings. These benefits have been essentially unchallenged in the record – and all can be achieved without any reduction of competition. As a result, there is no basis for a lawsuit to block the transaction.
If the acquisition is blocked, Comcast may look elsewhere for companies to complement its existing business and hedge against the decline of cable television services. It could seek to acquire a smaller competitor like Cablevision or a wireless provider like T-Mobile USA.
Comcast, which already owns NBCUniversal, could also seek another content company like Time Warner Inc. One wild scenario, floated by BTIG analyst Rich Greenfield (registration required), would have Comcast going after Netflix, which just surpassed CBS in market value.
Regardless, the real loser is likely to be Time Warner Cable, which would still trail Comcast in cable service but lack other businesses that might survive television’s shift to the internet. Its shares fell by about 5% on the news.