The proposed $45.2 billion merger of Comcast (CMCSA) with Time Warner Cable(TWC) seems certain to set off heavy regulatory scrutiny. A completed mega-merger between the two biggest cable operators would result in a combined customer baseof 30 million—just under 30 percent of the U.S. pay-television market.
David Balto, a public interest antitrust lawyer and a former policy director at the Federal Trade Commission, would be surprised if the Justice Department doesn’t end up challenging the deal. The deal would also come under review, at least, by the Federal Communications Commission and state attorneys general. But Balto predicts that it won’t be the potential consumer impact that draws the greatest consideration. He has been down this road before, having represented the Writer’s Guild in opposing the 2011 Comcast-NBCUniversal merger.
Both Comcast and Time Warner Cable buy content from the same partners, and the deal will give them increased market power and greater leverage to drive the cost of that content down. That could ultimately lead to less choice if market factors squeeze out some of the content developers. “There are relationships between cable entities in which they need to rely on each other, and size matters,” Balto says. “Comcast, once it becomes larger, will no longer be in a position to have to enter into these reciprocal relationships.”
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