Comcast bids $45 billion for Time Warner Cable

posted at 8:41 am on February 13, 2014 by Ed Morrissey

First, the bad news: another American industry threatens to close up ranks by consolidation. The good news? When we complain about cable service, at least we’ll all be talking about the same company:

Comcast said Thursday it had agreed to buy Time Warner Cable for $45 billion in a deal that would combine the two biggest cable companies in the United States.

If the deal is approved, the combined group will be the country’s dominant provider of television channels and Internet services.

Time Warner Cable (TWCFortune 500) owners will be offered 2.875 Comcast (CCV) shares for each share they own, valuing Time Warner Cable at about $158.82 per share.

The two companies expect the merger to take effect by the end of the year, but regulators are likely to take a close look at the potential impact on consumers.

To address those concerns, Comcast said it was prepared to divest about 3 million subscribers. But it would still have about 30 million customers.

Divest them to whom? Charter and Cox are the other big competitors in this market, along some smaller regional players, but they’ll pale in comparison to the Comcast/TWC behemoth. In fact, Charter wanted to bid for Time Warner Cable and talked about an acquisition last month, but Comcast beat them to the punch — largely by boosting its bid to just short of TWC’s asking price of $160 a share, up from their initial bid of $130.

The big question will be whether the Federal Trade Commission allows this sale to go through. The Obama administration sued to block the AT&T/T-Mobile merger in 2011 (and succeeded in scuttling the deal), even though that transaction would have consolidated a smaller portion of that market. Furthermore, the cell-phone market is inherently more competitive, as consumers have much more opportunities to switch carriers than in the cable business.

Then there is the question of Comcast’s connections to content producers. Comcast owns NBC, for instance, a deal that raised a few eyebrows but still managed to gain regulatory approval. Its size would make them much more competitive on pricing over Charter and Cox, and that plus their hold on NBC’s assets might be just a little too much for the White House to ignore, even for the politically-connected Comcast. This has anti-trust written all over it, especially for Democrats who have played the populist-progressive card more and more.

We’ll see what happens, but I’d be surprised if the Obama administration allowed the deal to go unchallenged in court.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comcast bids $45 billion for Time Warner Cable

But is the product good?
/

Electrongod on February 13, 2014 at 8:46 AM

Comcast is one of the worst companies on Earth. Not it will be even more atrocious. I didn’t think that was possible. I was wrong.

ThePrimordialOrderedPair on February 13, 2014 at 8:47 AM

I say let the deal go through with the proviso that Comcast has to offer cafeteria pricing so I’m not paying 75 bucks a month when the only cable channels I watch are Fox News and ESPN. Something similar happened when AT&T took over Bell South–the feds told them they’d have to offer stand alone DSL internet service as part of the deal. Before that if you wanted DSL here in Bell South’s area, you had to also pay for a landline. Now you can just have DSL.

radjah shelduck on February 13, 2014 at 8:47 AM

People still pay for cable?

MMK on February 13, 2014 at 8:51 AM

Then there is the question of Comcast’s connections to content producers. Comcast owns NBC, for instance, a deal that raised a few eyebrows but still managed to gain regulatory approval. Its size would make them much more competitive on pricing over Charter and Cox, and that plus their hold on NBC’s assets might be just a little too much for the White House to ignore, even for the politically-connected Comcast. This has anti-trust written all over it, especially for Democrats who have played the populist-progressive card more and more.

We’ll see what happens, but I’d be surprised if the Obama administration allowed the deal to go unchallenged in court.

You must be joking.

Connections between GE, NBC, and the White House are already glaringly obvious.

You don’t think they’ll support a deal that makes it easier to control the message 24/7 from a singular near monopolized source? The only reason for the divestment would be unprofitable sectors which they can use as a band aid to claim there is no effective monopoly.

Difficultas_Est_Imperium on February 13, 2014 at 8:51 AM

The big question will be whether the Federal Trade Commission allows this sale to go through.

REALLY?
NBC Comcast is the favorite propagandist of King BO.
The Deal IS Done!

SayNo2-O on February 13, 2014 at 8:51 AM

HE11 NO.

CPT. Charles on February 13, 2014 at 8:51 AM

If they blocked the ATT/T-Mobile merger (which they shouldn’t have) then they have to block this one involving their pals at NBC too.

If not, I may just begin to kinda suspect laws are being applied unequally in this country.

forest on February 13, 2014 at 8:52 AM

Cable companies are death.

The only way this could be worse is if they merged with Netflix to provide on-demand access to the worst movies ever made.

Bishop on February 13, 2014 at 8:54 AM

When TW bought our cable company they were the fourth owneers in the 15 years I’ve lived here. I knew what their reputation was and that our cable was going to go up. I hope they divest me. Maybe it will cost less and have better programming. I don’t know why I’m paying for all those channels I never watch. I have been leaving the PBS digital channel on all day. That’s how desperate I am. They have decorating, cooking, painting, gardening.

crankyoldlady on February 13, 2014 at 8:55 AM

If they blocked the ATT/T-Mobile merger (which they shouldn’t have) then they have to block this one involving their pals at NBC too.

forest on February 13, 2014 at 8:52 AM

Yep. I don’t see this going through…giving Comcast any more power in the market would be as anit-consumer as you can get.

changer1701 on February 13, 2014 at 8:55 AM

that plus their hold on NBC’s assets might be just a little too much for the White House to ignore, even for the politically-connected Comcast. This has anti-trust written all over it, especially for Democrats who have played the populist-progressive card more and more.

That only means that Comcast has to make even more political donations to the Fascist-Democrat party. And make sure thee NBC content is even more in line with the Party Diktats.

It’s not your father’s anti-trust legislation anymore.

rbj on February 13, 2014 at 8:56 AM

The problem is there are a few “real Democrats” left – they just call themselves “Republicans” now.

Anti-trust. Hhahahahahaha. What ever became of the SEC anyway? Do we still have one or are they also gearing up for the revolution?

crankyoldlady on February 13, 2014 at 8:57 AM

Regime TV

forest on February 13, 2014 at 8:58 AM

That’s odd. That wasn’t what I highlighted to quote.

crankyoldlady on February 13, 2014 at 8:59 AM

“I may just begin to kinda suspect laws are being applied unequally in this country.”

the deuce u say!
:-)

ABreitbart on February 13, 2014 at 9:00 AM

I’ve got Consolidated. I’ll stick with them for the following reasons:

1) They’re way cheaper.
2) They carry HDNet Movies.
3) They don’t own MSNBC.

Doughboy on February 13, 2014 at 9:01 AM

I think this is an interesting proposition for POTUS. Didn’t he vacation in the Martha’s Vineyard home of Comcast President Brian Roberts a couple of years ago?

SquareHead on February 13, 2014 at 9:04 AM

We’ll see what happens, but I’d be surprised if the Obama administration allowed the deal to go unchallenged in court.

Nope. David Cohen, Comcast’s EVP, is a prolific Democratic donor. He hosted a million dollar fundraiser for the DSCC in November that Obama attended. He’ll get his merger and an embassy appointment in some place warm.

It’s more likely that a Democratic governor will challenge it using state antitrust laws. He irked many PA Democrats when he donated to Corbett.

blammm on February 13, 2014 at 9:05 AM

I say that Obama will gladly approve the deal as long as NBC keeps shilling for him and the Dems. Why would he not? Sure, he might take some heat for it, but then he does not even have to issue an EO to make it happen.

Techster64 on February 13, 2014 at 9:09 AM

To watch one channel, I have to buy several others…

When they have a monopoly, watch what happens…sky rocket rates, however, since they shouldn’t be advertising (since the “own” the market), and the stations have to concede to them prices should drop.

I mean what is the NFL going to do, say they won’t pay a lower price, and therefore not be televised?

But they won’t…

right2bright on February 13, 2014 at 9:09 AM

I seem to recall stories that a lot of people were dropping cable TV.

I dropped my cable TV a long time ago after I got dissatisfied with their with service. I went for a couple of years without TV, then I went with DirecTv for about 10 years. Last year I decided I just don’t need to watch TV at all. So I dropped them last year. There’s so little I care to watch anymore, and nothing I have to see when it comes out for the first time.

Books are a good substitute.

RDH on February 13, 2014 at 9:12 AM

C’mon its Obama he’ll be OK with this….

cmsinaz on February 13, 2014 at 9:13 AM

I seem to recall stories that a lot of people were dropping cable TV.

I dropped my cable TV a long time ago after I got dissatisfied with their with service. I went for a couple of years without TV, then I went with DirecTv for about 10 years. Last year I decided I just don’t need to watch TV at all. So I dropped them last year. There’s so little I care to watch anymore, and nothing I have to see when it comes out for the first time.

Books are a good substitute.

RDH on February 13, 2014 at 9:12 AM

I’d love to drop cable TV, but there are those handful of channels I need. CSN for Rockets games. FoxNews for Special Report. Sprout and Nickelodeon for the little guy. And HDNet Movies for the occasional classic film that’s nowhere to be found on Blu-ray. They really need a system where you can pick and choose a few channels you want and discard the rest.

Doughboy on February 13, 2014 at 9:16 AM

My 2-3 shares of stock could increase in value. Significantly!

Jeddite on February 13, 2014 at 9:18 AM

Comcast’s officers are big contributors to Mr. Obama.

oldennis on February 13, 2014 at 9:22 AM

If you’re dumb enough to pay to watch TV, well .. you’re just really dumb.

corona79 on February 13, 2014 at 9:29 AM

My Lord, it sounds like Daily Kos over here. Anti-consumer? How progressive! So Teddy Roosevelt! I thought conservatives believed in the free market. At least the libertarians now swarming all over this site should be for the deal, right? I’m sure Rand Paul will come out in full support, and sue if the Obama administration attempts to scuttle this deal.

Joseph K on February 13, 2014 at 9:35 AM

I think this might be like the music industry, everything is about to change. More people are going to get their stuff from Netflix and the like. I have to say that we have Comcast and they have been okay, except they make you get these “digital” boxes that Cox, in VA doesn’t have.

Cindy Munford on February 13, 2014 at 9:41 AM

blammm on February 13, 2014 at 9:05 AM

And the President of NBCU was a big-time W bundler. So it’s sort of moot.

So…this falls into in my field of work.

The issue isn’t about cable service, that’s the a la carte argument McCain has been making for nearly twenty years. You need FCC people who believe in that. Right now, there’s one or two.

Under Michael Powell and Kopps, we could have gotten a la carte. Thank W and Barry for that not occurring. That was the payback to the bundlers.

Cable companies project 5-10 years ahead. It’s why the parent company never seems to give a sht about your current quality.

What this merger and subsequent fight is about, is broadband. Cohen is promising to adhere to Net Neutrality rules as a sop to progs, but again, that’s moot.

This is about app channels like Netflix and Blaze. Cohen is promising to offer internet-only packages, meaning you don’t have to buy a bundled phone/cable/broadband, but the bandwidth is going to be dck for streaming shows via smart TV’s.

We have too many moving pieces now for one company to play content gatekeeper. For example, if Comcast decided to block all Fox channels, wireless smart device carriers would jump all over it as it would guarantee a few new million subscribers and accelerate cord-cutting.

So they can’t censor currently existing channels. But, by controlling the bandwidth for app-based channels, they can control future pricing structure.

This way, it gradually implements the tier-based carrier fees of cable onto broadband channels, circumventing all the different models, from YouTube to Netflix, in one move.

The irony is Time-Warner was only spun out because of the AOL-TW merger. While it was not forced by the FCC, it was always part of an unofficial agreement and when it happened, a way for shareholders to recoup.

This is the exact opposite in structure. If someone wants to fight the merger, all they have to do is point to AOL-TW, and the FCC could then make Comcast decide what they are.

If this goes through with no struggle, then we’re going to see the case for movie theaters and studios re-merging, as it’s the same argument.

By owning NBCU, Comcast acts as the defacto lobbying arm for the entire entertainment industry as they all share the same vested interest.

budfox on February 13, 2014 at 9:41 AM

Take bad and worse, add them together and what to you get?

Horrible.

climbnjump on February 13, 2014 at 9:44 AM

Two of the provisions the JustUs Department will attach are:

- Comcast drops all News Corp-owned and News Corp-affiliated channels from its lineup.

- Comcast blocks access to all News Corp-owned websites.

Steve Eggleston on February 13, 2014 at 9:47 AM

…screw ‘em!

KOOLAID2 on February 13, 2014 at 9:50 AM

I thought I got away from Comcast when I moved from Olympia, WA to the middle of Ohio. Here, I got Insight, whom TWC bought a couple of years ago. I don’t want Comcast again. Horrible customer service.

sadatoni on February 13, 2014 at 10:01 AM

budfox on February 13, 2014 at 9:41 AM

If only we had a system of laws, rather than whims…

blammm on February 13, 2014 at 10:12 AM

comcast cable service has been so bad where i live that they have lost at least 50% of their business to verizon in the past 2 years. the local consumers have really benefited from the competition.

gracie on February 13, 2014 at 10:13 AM

On the bright side, the local Ma Bell is starting to run fiber in my neck of the woods. I’ll have to start researching that option.

CPT. Charles on February 13, 2014 at 10:18 AM

Doughboy on February 13, 2014 at 9:16 AM

There was an interesting discussion on a QOTD thread a few nights ago about how a Roku box could replace most of cable and being able to subscribe to what you want…I’m looking into it.

Shay on February 13, 2014 at 10:27 AM

Not a chance this slips through the regulators.

macphisto96 on February 13, 2014 at 10:31 AM

Don’t be surprised. Politically connected means a lot.

But if Salem were to buy NBC the alarums would go out all over the Leftosphere.

njcommuter on February 13, 2014 at 10:32 AM

There was an interesting discussion on a QOTD thread a few nights ago about how a Roku box could replace most of cable and being able to subscribe to what you want…

Shay

It doesn’t. It’s neat to have, but it doesn’t come anywhere close to replacing cable. If you want something similar that will, look into android tv boxes, preferably one with a web browser. If you have a web browser, you can get pretty much anything you want.

xblade on February 13, 2014 at 10:54 AM

Not a cable user, but I have TWC broadband.

Google fiber is coming to Austin, but when exactly it gets to any given neighborhood is a crap shoot and a choice between Comcast and Google is a tossup, ideologically.

TexasDan on February 13, 2014 at 11:00 AM

I have TW and will be changing to Uverse. No way do I want to pay these clowns to keep MSNBC alive.

Tater Salad on February 13, 2014 at 11:01 AM

If you’re dumb enough to pay to watch TV, well .. you’re just really dumb.

corona79 on February 13, 2014 at 9:29 AM

You’re right of course but it’s an addiction. I’m used to having it on all day.

crankyoldlady on February 13, 2014 at 11:42 AM

Comcast is one of the worst companies on Earth.

ThePrimordialOrderedPair on February 13, 2014 at 8:47 AM

The day I cancelled cable, after weeks of non-customer service, they made me do an “exit interview” with a nice young woman in Denver who was polite and spoke perfect English.

She promised me world peace, her firstborn child and a “deep discount” on premium channels until the next comet appeared in the northern skies if I would just keep forking over my dough for cable.

I told her while I appreciated the offers, and that while I generally don’t root for businesses to fail, that it would be a happy day in the Strozek household when Comcast goes tits up.

She said a lot of people told her that.

Bruno Strozek on February 13, 2014 at 11:50 AM

Divest them to whom? Charter and Cox are the other big competitors in this market, along some smaller regional players

If Charter (4,540,290 subscribers) and Charter (4,148,000) are the “other big competitors,” then that must make Verizon FIOS (4,726,000) and Cablevision (3,197,000) the “smaller regional players.”

See this link for more specifics.

bgoldman on February 13, 2014 at 11:58 AM

HA Word Police:

T its is a forbidden word? Really?

Good grief.

Bruno Strozek on February 13, 2014 at 12:03 PM

Adelphia cable was bad… I mean the pits.

Comcast took it over.

It got worse.

Verizon FiOS sucks but it sucks less than Comcast.

We need local competition over public cable runs in copper and fiber optic. I detest these companies and the suck-up mentality of local government to them… but try and find someone who will buck the system.

ajacksonian on February 13, 2014 at 12:32 PM

Leftist comcast will get INSTANT APPROVAL from the OBOZO regime to take over TW for several reasons: 1. Comcast CEO roberts is a huge financial backer of OBOZO, and 2. he’s a totally committed leftist extremist who will extend the leftist propaganda/bias in all comcast/nbc programs to TW Cable.

TeaPartyNation on February 13, 2014 at 1:22 PM

My condo association went from bulk DirecTV to RSN, which is a cable provider. Their reasoning included the statement that
Trump Towers used RSN, an excuse not a reason. RSN is only slightly better than Comcast. Though I must admit I never thought I’d have a Turkish language channel on a cable company in Chicago. “All I want for Christmas is my DirecTV back . . . .”

polarglen on February 13, 2014 at 2:02 PM

DUH:

Tweets

The Hill ‏@thehill 2m

Comcast, Time Warner

execs have been big Obama supporters

http://trib.al/k7VxTkC by @JTSTheHill
View summary
=================

https://twitter.com/thehill

canopfor on February 13, 2014 at 2:12 PM

Comcast, Time Warner Cable merger
3h
Sen. Al Franken, D-Minn., sends letter to DOJ, FTC and FCC expressing ‘serious reservations’ about Comcast-Time Warner Cable deal – @chrisgeidner

canopfor on February 13, 2014 at 2:16 PM

Didn’t Obama vacation at the home of Comcast CEO on Martha’s Vineyard last year? This merger will breeze through.
The ATT-T-Mobile merger would have made sense, so of course, they blocked it.

lonestar1 on February 13, 2014 at 2:48 PM

Comcast, Time Warner Cable merger
3h
Sen. Al Franken, D-Minn., sends letter to DOJ, FTC and FCC expressing ‘serious reservations’ about Comcast-Time Warner Cable deal – @chrisgeidner

canopfor on February 13, 2014 at 2:16 PM

Looks like Franken drew the short straw this time.

Gator Country on February 13, 2014 at 6:35 PM

even for the politically-connected Comcast

That is all you need to know about the the politics of the situation. I’m predicting that the deal goes through with only a token “divestiture” on the part of Comcast. And I guarantee that whatever the demand is, it will be sold by the White House as Obama taking a hard line and extracting firm concessions from the guilty parties.

And, of course, the press will play along dutifully.

In the meantime, the DNC coffers will be filled to overflowing by all involved.

nukemhill on February 13, 2014 at 8:14 PM

Comcast knows how to get things done, unlike US Air and American Airlines.

Buying corrupt politicians is the way to get ahead in the crony-capitalist USA of today. It may be legal, but most corruption is legal. It still is corruption though. It is not only legal, but is mostly institutionalized in the modern political-industrial complex.

There may be a lot a weeping and gnashing of teeth around the White House and claims of “we just couldn’t make the case to stop the deal”, and then the deal will go through. It may have to wait though until after the 2014 elections, and maybe 2016 as well.

If the Keystone Pipeline folks had been smart about where to put their campaign bribes, er… I mean contributions, then that pipeline would have gotten the go-ahead right after the elections in 2010.

s1im on February 13, 2014 at 8:33 PM