Justice Department attorneys are leaning towards a recommendation against Comcasts’s attempt to take over Time Warner Cable that could be announced as early as next week.
Last year’s proposed merger between the two cable giants is currently under review by federal regulators, who are weighing concerns that it would violate antitrust rules by creating one massive cable giant.
Justice Department attorneys are said to be nearing a recommendation, in new developments first reported by Bloomberg News. Even if they recommend against Comcast acquiring Time Warner, however, government officials would still have to decide to whether to file a lawsuit to block it.
An official endorsement of the proposed merger would still face roadblocks ahead, as the government could demand big concessions from Comcast like divesting itself of more subscribers.
It would be a major letdown for Comcast if the deal were to collapse at any point along the process, because the company has sought to better compete with satellite, Web and telecommunications companies that have stolen thousands of its TV subscribers.
But there are monopoly concerns at stake. If the merger occurs, Comcast will control nearly 30 percent of the country’s pay television subscribers and an estimated 35 to 40 percent of broadband Internet service.
Comcast argues the merger wouldn’t be anti-competitive. Spokeswoman Sena Fitzmaurice said this week there is no “basis for a lawsuit to block the transaction.”
“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,” she said. “These benefits have been essentially unchallenged in the record — and all can be achieved without any reduction of competition.”
Share prices for both companies dropped on Friday, indicating investors are pessimistic about the deal winning approval.
