In the wake of news that Comcast-TWC was meeting with the Department of Justice about their proposed deal this week, Bernstein Research analyst Paul De Sa said his team still thinks the deal is more likely to get done than not. De Sa suggests that clients take stories about the deal's progress with a grain or two of salt.
The Wall Street Journal reported first that DoJ staffers were leaning against the deal and that Comcast and Time Warner Cable were having a meeting this week about the deal and potentially talking conditions.
A Comcast source confirmed on background that there was a meeting this week, but said it was one in a series of meetings, which were scheduled before the latest stories suggested DOJ might be leaning away, and could not characterize what the agenda was.
At this stage of the deal vetting, it could well be a meeting talking about conditions and, if so, might suggest DoJ had not made up its mind quite yet.
After all the presentations and deposition and meetings, said the source, DoJ may well have narrowed its issues and potential concerns.
Neither the DoJ nor FCC are likely to be ready to weigh in until a D.C. Federal court weighs in on whether third parties will be allowed to see thousands of pages of program negotiation work. A politically divided FCC said yes, programmers said no and challenged that decision in court. The parties to the deal stayed out of it, not wanting anything to further delay a decision on the deal, which has an August break-up trigger.
De Sa warns against reading too much into the process stories.
"We strongly believe that this decision will be made based on the vast, transaction-specific fact base that regulators have assembled during the past year (not on politics, or the FCC's 25 Mbps broadband definition, or Title II classification of broadband, or the amount of noise generated by deal opponents). As almost all of this fact base consists of highly-confidential information, unknowable from the outside, it is in principle impossible to have a high conviction about the outcome at this stage, although we still think that it more likely than not that the deal will be approved with conditions."