A heartfelt message to you from Comcast regarding their merger with Time Warner.
In a public letter to Comcast CMCSA -0.31% and Time Warner Cable TWC -0.6% executives, the FCC announced that it is hitting the pause button on its review of the proposed $45 billion merger. Citing inadequate responses by both cable companies to earlier FCC requests for additional information, the agency is stopping the clock on its 180 day review period until late October. This latest move may give even more momentum to opponents of what was initially seen as near-certain approval of the blockbuster merger between the nation’s top two cable operators.
Comcast and Time Warner Cable announced their merger proposal back in February. The companies repeatedly stressed that the deal would not result in less choice for consumers since Comcast and Time Warner TWX -0.61% do not compete in the same geographic markets. Critics of further industry consolidation have argued that such a deal would place about 35% of the country’s Internet customers under the umbrella of a single company, one that already has a sizeable stake in content creation, thanks to Comcast’s earlier acquisition of NBCUniversal. In recent weeks, merger opponents have been buoyed by public criticism from Netflix NFLX -1.53%, Discovery Communication, and DirecTV. This criticism has led to an uncharacteristically harsh rebuke from Comcast, a move that many think signals genuine worry by the media giant over the prospects of merger approval.
In explaining the regulatory review delay, the FCC cites recent filings submitted by Comcast stating that its acquisition of NBCUniversal has not led to higher prices for NBC national networks and local TV stations, an outcome that runs counter to the FCC’s own analysis. The FCC is seeking independent verification of this claim as well as more detailed answers from Comcast and Time Warner Cable to questions the FCC asked about the merger over the summer. At the time the delay was announced, the FCC was 85 days into a 180-day review process. Under the announced delay, the FCC expects to restart the clock on October 29, the new deadline for public comments on the deal. This pushes a final recommendation on the merger into 2015.