Would Washington Allow a Cable-TV Megamerger?

Comcast appears to be considering a bid for Time Warner Cable. Of course, it may have to beat an offer that Charter Communications is putting together -- unless, that is, the two companies can find a way to make a joint bid. So should you care about what is shaping up to be a major consolidation of the cable industry? And will Washington?

A person involved in the deal says that Comcast doesn’t think the government would stop such a deal on antitrust grounds, but there will certainly be others trying to convince regulators to do so. Cable companies, of course, don’t really compete in the US. Your cable provider is wholly a function of where your house is. But if the companies do merge, the combination of Comcast and Time Warner Cable would create one giant provider covering more than 60 percent of subscribers nationwide and would account for one-third of all pay-television customers, according to industry analyst Craig Moffett. The Federal Communications Commission could challenge a merger on the general grounds that it’s bad for consumers. “The challenge is that a Comcast-Time Warner Cable combination would be so large that you could argue that you couldn’t survive as a programmer without a distribution agreement from Comcast,” says Moffett. It’s clear that the specifics will obviously impact how regulators react to it. Either way, it will be an interesting early test for new FCC Chairman Tom Wheeler, a former lobbyist for the cable industry who has made it a point to talk up how aggressively he plans to protect consumer interests.