Influential Internet and media analyst Richard Greenfield, in a blog posting Wednesday, detailed why he believes the $67 billion Comcast-Time Warner Cable merger won’t receive regulatory approval, noting that the decision will ultimately come down to broadband dominance.
Both Comcast and Time Warner Cable shares were up about 2% each in early trading on Wednesday, a day when Federal Communications Commission chairman Tom Wheeler publicly stated that he proposes the agency use it Title II powers to “implement and enforce open internet protections.”
In his blog, the BTIG Research analyst, who has warned in the past that the deal could be blocked, wrote that with Title II reclassification of broadband looming, it is almost unimaginable that federal regulators would approve the deal.
Greenfield noted that while the Federal Communications Commission has harped on broadband speeds – increasing its definition of a broadband service from 4 Megabits per second to 25 Mbps – the real issue is choice and availability. In its own literature, Comcast admitted in 2013 that after the merger, they will be the only choice for 25 Mbps or higher for about 63% of the households in their combined footprint . Greenfield adds that figure is probably even higher now.
Add to that the growing public sentiment against the deal and Greenfield believes the chances are slim that it passes muster.
“With the overlay of the populist uprising driving government policy, it is hard to imagine how regulators could approve the Comcast Time Warner Cable transaction at this point,” Greenfield wrote. “Comcast continues to try to get the government to look to the past to get its deal approved. But the framework is about not only what is current, but what the future will look like – especially in a rapidly changing broadband world.”