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Bloomberg: DOJ Leans Against Comcast Merger

4/20/2015 8:00 AM Eastern

A late Friday-afternoon report by Bloomberg that Department of Justice staff attorneys were leaning toward recommending against approving the Comcast-Time Warner Cable deal could not be confirmed at press time, and sources close to Comcast indicated talks with DOJ were ongoing.

 

If accurate, the recommended denial would still be only a recommendation. But the report adds to growing uncertainty about the deal. Wall Street handicappers have been reducing their odds on approval, particularly given the merged company’s combined broadband subscriber count.

 

Comcast has pointed out that a merger would not lessen competition for broadband access since it does not compete with Time Warner Cable for those subscribers now. But it’s the combined count under one company that critics point to.

 

Bloomberg also reported that DOJ staffers were not working with Comcast to resolve DOJ issues.

 

Comcast wouldn’t comment on the Bloomberg report. Speaking on background, though, a source familiar with Comcast’s meetings with regulators said the company continued to have productive discussions with the DOJ and the FCC, as it has throughout this process. For its part, the FCC is still in the information-collection process on the deal.

 

“We’ve had no indication from the DOJ that this is true,” TWC executive vice president and chief communications officer Ellen East said in an email message concerning the Bloomberg article. “We’ve been working productively with both the DOJ and the FCC and believe there is no basis for DOJ to block the deal.”

 

Comcast first announced its plan to acquire TWC in February 2014. On Friday’s news, Time Warner Cable shares dipped more than 5% ($8.19) in afternoon trading to $150.01 per share. Comcast fell 2.3% ($1.38) to $58.29.

 

“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,” Comcast said in a statement. “These benefits have been essentially unchallenged in the record — and all can be achieved without any reduction of competition. As a result, there is no basis for a lawsuit to block the transaction.”

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