FCC, Wall Street Weigh In on Regulatory Review of Charter-Time Warner Cable Deal
Chairman Tom Wheeler says "an absence of harm is not sufficient" as analysts discuss the Washington outlook for the latest cable deal.
FCC chairman Tom Wheeler on Tuesday reacted to Charter Communications' deals to acquire Time Warner Cable and Bright House Networks.
"The FCC reviews every merger on its merits and determines whether it would be in the public interest," he said in a statement.
"In applying the public interest test, an absence of harm is not sufficient," he added. "The commission will look to see how American consumers would benefit if the deal were to be approved."
The FCC had opposed Comcast's plan to acquire TW Cable.
Wunderlich Securities analyst Matthew Harrigan said Tuesday in a note to investors: "We think that transaction will pass regulatory muster with the largest contingency being demonstrated accommodation to over-the-top video competitors and the deal can be cast as pro-consumer with an even faster and more ambitious TWC network upgrade and prospects for a more aggressive new product array in areas such as Wi-Fi."
He also highlighted that Charter doesn't own content businesses. "We also think that Comcast's NBCUniversal ownership was a huge political firewall, including for cross-ownership in the major media and financial markets of New York and Los Angeles," Harrigan explained.
Macquarie Securities analyst Amy Yong warned investors though, saying: "Don’t take regulatory approval for granted."
"Regulatory approval is no longer a given, but we expect this is highly probable and greater than Comcast-Time Warner [Cable]," she wrote in a report. "The issue behind Comcast-Time Warner [Cable] was broadband market power of 57 percent-plus, programming procurement and ownership of NBCU/Hulu. Charter-Time Warner-Bright House carry none of these issues but conditions around merger approval could still exist."
She concluded that deal approval "should come in less than 12 months."