FCC Pauses Review of Comcast-Time Warner Cable, DirecTV-AT&T Deals
It's the second time this month that the FCC has stopped the clock on its 180-day review period
Reviews of Comcast's proposed $45 billion acquisition of Time Warner Cable and AT&T's offer to buy DirecTV for $48.5 billion have been paused by the Federal Communications Commission, the agency said on Wednesday.
It's the second time this month that the FCC stopped the clock on its 180-day procedure. The agency says it is targeting early 2015 for completion of its reviews. The AT&T-DirecTV deal was on its 76th day of review while Comcast-TWC was on its 85th day.
Both of the controversial merger proposals are under heavy scrutiny from lawmakers, consumer groups and other media companies such as Netflix, Discovery Communications and Dish Network.
All four of the companies involved in the two merger proposals are expected to make certain concessions designed to encourage both the FCC and the U.S. Department of Justice to approve the transactions, such as selling off certain assets.
Some competitors and content providers, though, have been asking that renegotiated carriage deals be part of the equation and, in some cases, that assurances be made that certain channels will be added or not dropped from consumer packages if the companies are allowed to merge. Comcast has responded by accusing Netflix, Discovery and others of using the FCC review procedure to advance their own financial interests.
One hold-up is that the FCC wants to know what Comcast, TWC, DirecTV, AT&T and their competitors are paying media companies like CBS and 21st Century Fox for rights to their content. The content companies, though, are hesitant to supply such sensitive financial details.
Investors, meanwhile, have been cautiously optimistic that the mergers will be approved, though many have predicted a longer-than-usual review period. On Wednesday, shares of Time Warner were trading down 1 percent to $138 while the price Comcast is paying to acquire the company is about $153 per share in stock and cash. Shares of DirecTV were off fractionally to $86 on Wednesday whereas AT&T is paying $95 a share to acquire the company.
"As we noted previously, it is routine for the FCC to pause the review of significant transactions as it works to create a full record," said Sena Fitzmaurice, vp government communications for Comcast. "The Commission is working to hear the concerns of various parties. In the meantime, review of information and evidence already in the docket will continue. We are confident that the Commission will quickly resolve these issues while continuing its work so that review will be completed in early 2015."