The largest cable merger ever cleared the final hurdles Wednesday when both the Federal Communications Commission and Department of Justice said they would not block the deal.
"We are very pleased that the FCC has favorably concluded its review of our merger. We look forward to moving ahead expeditiously to closing," said Comcast Corp. president Brian Roberts, who becomes CEO of the newly formed AT&T Comcast Corp., based in Philadelphia.
The FCC voted 3-1 along partisan lines to approve the $54 billion merger. It imposed one condition that had been voluntarily offered by the companies from the beginning: The FCC said the new company must place its interest in Time Warner Entertainment in a trust and divest the asset within five-and-a-half years.
In a brief statement, FCC chairman Michael Powell said the "benefits of this transaction are considerable; the potential harms negligible."
Powell was a no-show at the FCC-held press conference. FCC Media Bureau chief Kenneth Ferree told reporters the merger "would pose no substantial public-interest harms -- none."
Big isn't always bad, he said. "In short, it's easy to react viscerally to the combination of any two large companies. On the facts here, this combination solves problems, it does not create them," he added.
Immediately after the FCC announced its decision, the DOJ declared that it would not block the deal.
"After a thorough investigation and analysis that included a large number of interviews of industry participants and a review of documents from various firms in the business, the department's Antitrust Division has closed its investigation into the merger," the DOJ said in a prepared statement.
According to the FCC, AT&T Comcast will serve 27 million cable subscribers (not 22 million, as widely reported), giving the company 29 percent of the entire pay TV market.
Last month, both agencies rejected the much smaller, 18 million-subscriber direct-broadcast satellite merger between EchoStar Communications Corp. and DirecTV Inc. parent Hughes Electronics Corp.
Ferree insisted that the mergers were entirely different in terms of their impact on competition.
Democratic commissioner Michael Copps, reflecting the sentiments of consumer groups, said he voted against the merger because it would cause cable rates to rise and reduce competition in the cable-acquisition market.
Media Access Project, a public-interest law firm, announced that it was suing the FCC on behalf of consumer groups for approving a merger that will allegedly reduce program diversity, produce higher cable rates and threaten the freedom and openness of the Internet.
MAP has already sued to gain access to AT&T Comcast's broadband-carriage deal with AOL Time Warner Inc.
Ferree, in the past an outspoken critic of rising cable rates, indicated that a spike in rates was not inevitable due to the merger.
"What happens to cable rates at this point would really be purely a matter of speculation. We found nothing in the record to suggest that this proposed combination would likely result in higher rates," he added.