Comcast could abandon TWC merger if ?

Comcast could abandon TWC merger if ?

Comcast could abandon TWC merger if government imposes tough conditions

Comcast and Time Warner Cable officials are scheduled to meet with Department of Justice antitrust officials on Wednesday "to discuss potential remedies in hopes of keeping their $45.2 billion merger on track," The Wall Street Journal reported yesterday.

DOJ antitrust lawyers are reportedly close to recommending that the government block the deal. Comcast might be able to save the merger by agreeing to conditions, but the cable company could also walk away from the deal if the government asks for conditions to which it objects.

When announcing the merger in February 2014, Comcast said the acquisition agreement did not include a break-up fee, noting that the lack of one reflected its confidence that the deal would be approved. With the government's merger review now having taken months longer than expected, the absence of a breakup fee would let Comcast abandon the merger without having to compensate Time Warner Cable. (In 2011, AT&T had to pay $3 billion to T-Mobile and then transfer spectrum to the company after the DOJ and FCC sunk a proposed merger between the companies.)

The Journal's sources flagged a possible net neutrality requirement as one that could cause Comcast to abandon the TWC deal. The FCC issued new net neutrality rules for Internet providers this year; a merger condition could require Comcast to follow the rules even if they are later blocked in court.

Comcast agreed to a similar condition based on an earlier version of net neutrality rules when it bought NBCUniversal in 2011. However, the new rules are stricter than the previous ones and include a reclassification of broadband as a common carrier service, which brings heavier regulation than broadband's previous classification as an information service.

As part of the Comcast/TWC review, the DOJ and FCC are examining whether Comcast has fully complied with the NBCUniversal conditions, the Journal wrote. The newspaper also raised the possibility of the FCC "designat[ing] the merger for a hearing," a procedural move that could be the first step toward blocking it.
However, recommendations by staffers at government agencies don't have to be followed by the agencies' leaders. Neither the DOJ nor the FCC have made any public statements about their intentions for the merger.

Cr.Ars Technica