According to sources familiar with the matter, the Department of Justice is likely to soon block the $45.2 billion merger between Comcast and Time Warner Cable out of concerns that U.S. consumers and competition would be affected in a negative way.
Justice Department’s antitrust division attorneys that currently investigate Comcast’s deal could submit their final conclusions next week, sources also said. But the final decision would be made by the division’s senior members.
However, if the deal gets rejected, Comcast will have to face a hard blow as it would lose the opportunity of gaining valuable cable infrastructure from Time Warner Cable in major U.S. cities including L.A. and N.Y.C.
The merger was designed to help Comcast also gain a major competitive boost against other telecommunications giants who have already siphoned thousands of TV subscribers from Comcast in the past few years.
Renata Hesse, one of the DOJ investigators who will have the last word in the Comcast-Time Warner Cable merger, will decide along with her top-ranked colleagues whether to file a lawsuit to block the deal.
DOJ lawyers are currently also analyzing whether such a major merger would negatively impact competitors involved in the online video streaming business, such as Sling TV and Netflix.
Sources also claim that DOJ investigators consulted several third parties to learn whether the danger that consumers and competitions would be exposed to was real. They also struggled to gain evidence against the merger in a incoming federal lawsuit.
Moreover, antitrust division lawyers and the Federal Communications Commission have no plans to negotiate with Comcast the terms of the deal to solve the concerns that triggered the investigation. Comcast will not be politely requested to either sell parts of its business or change its business practices. Its proposal to merge and create one of the America’s largest cable giants will be accepted or rejected in bulk.
Comcast requested DOJ and FCC approval for the merger since last year, when the deal was announced. Comcast announced that it was ready to fight any decision in court and even reach an agreement. Still, since DOJ investigators have yet to complete their recommendation, the cable giant is confident.
A Comcast spokesperson recently said that there was no legal basis for a lawsuit to block the deal. The company also claims that the merger would lead to “significant consumer benefits” such as faster lanes, more competition, billions of dollars worth of cost savings, and enhanced video streaming experience.
A Time Warner Cable spokesperson recently reported that his company had been collaborating with DOJ and the FCC and no reason to block the transaction was looming. Both spokespersons for the Justice Department and the Federal Communications Commission declined to comment.
Renata Hesse is currently overseeing the DOJ investigation on the merger because Bill Baer was recused. He was a representative of NBCUniversal when Comcast purchased it four years ago.
The Justice Department lawyers are currently analyzing how a merger between the U.S. two largest cable companies would reshape the cable providing services industry across the country. Such a transaction would surely impact both the Internet and television, and it would influence how and what Americans watch.
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