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Monday, April 12, 2021
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Comcast-TWC acquisition deal fails amid federal pushback

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The multi-billion dollar merger talks between the top two cable companies of the United States, Comcast and Time Warner Cable (TWC) came to an end on Friday amid heavy federal regulatory pushbacks.

The plan of acquisition was abandoned by Comcast after both US Department of Justice and Federal Communications Commission (FCC) blocked the merger after raising concerns that the deal would give the company an unfair advantage over other players in the cable TV and web-based services market.

Announcing the development, Comcast CEO Brian Roberts issued a statement this morning saying, “Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away.”

Commenting over the end of the merger talks, TWC chief executive Robert Marcus said, “Time Warner Cable is a one-of-a-kind asset that continues getting stronger,  thanks to the company’s commitment to bring great experiences to our customers.”

Reacting over the termination of the deal between the two leading cable companies, FCC chairman Tom Wheeler said, “The proposed transaction would have created a company with the most broadband and the video subscribers in the nation alongside the ownership of significant programming interests.”

Echoing similar sentiments on the failed merger, Attorney General Eric Holder said, “This is a victory not only for the Department of Justice, but also for content and streaming services providers who work to bring innovative products to consumers across America and around the world.”

The proposed acquisition deal, which was formally announced by the companies last February, had received sever criticism from several politicians, media firm executives, rival cable companies, industry and consumer groups, who had raised concerns that the merger would lead to the creation of a monolith with too much control over what Americans watch on TV or do online.

Comcast likely to drop plans to merge with Time Warner amid fed hurdle

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Reports are abuzz that American cable provider Comcast is likely to call off its USD 45 billion acquisition attempt to buy rival Time Warner Cable amid the recent reports that both the Federal Communications Commission (FCC) and the US Department of Justice are preparing to turn against the billion dollar agreement after spending months while looking into what the proposed merger would mean for competition in the country’s cable market.

The decision has apparently come after the company witnessed an increased scrutiny and stiff opposition from the federal regulators, forcing it to walk away from the proposed merger that would have resulted in the combination of the country’s top two cable operators.

According to the sources, the company has still not revealed its mind over the cancellation of the deal and an official announcement in this regard could arrive as early as tomorrow.

Both Comcast and Time Warner Cable had formally announced about their merger plans in February last year. The shareholders of both Comcast and Time Warner Cable had signed off on the idea last October. But the companies met a huge hurdle of regulatory approval.

Comcast has taken out public campaigns in favor of the acquisition deal for over a year now. However, the merger proposal has witnessed a fierce opposition from the rival firms and critics, who are warning that a Comcast-Time Warner Cable combination would control 40 percent of the broadband market of the United States. Moreover, they also believe that the merger will lay claim to a drastic hold in the share of the cable market.

The FCC has yet to take decision over the deal that whether it is in the public interest. Also, the US Justice Department will be ruling that the merger does not harm competition in the cable market.

US Justice Department likely to block $45.2 bn Comcast-TWC merger deal

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The staff attorneys at the antitrust division of the US Justice Department are approaching a recommendation to block the USD 45.2 billion merger proposal between Comcast Corps. and Time Warner Cable Inc., according to the reports.

The report cited sources familiar with the matter saying, the attorneys probing the merger proposal are highly concerned that such an agreement between the two majors would harm consumers’ sentiments.

The attorneys are expected submit their review against the merger proposal as early as next week, sources said. Senior officials will take the final decision on the multi-billion-dollar merger deal.

Downplaying the reports, a TWC spokesperson said that the company has been productively working with both the Federal Communications Commission (FCC) and the Department of Justice (DOJ).

“We’ve had no indication from the DOJ that the report is true,” the spokesperson said.

A Comcast spokesperson has said that the proposed merger deal would result in ‘significant consumer benefits.’

The proposed merger of the two cable television giants has drawn criticism from the Comcast competitors and groups opposing media mergers.

A group of companies, associations and public interest groups on Friday moved FCC to oppose the deal between the top two cable television operators.

In a letter to FCC Chair Tom Wheeler, the groups wrote: “The combined company would, among other things: control over half of the high-speed residential broadband connections in the United States; dominate pay-TV across the nation; combine even stronger distribution muscle with NBC-Universal’s ‘must-have’ video programming; and control critical advertising and set top-box inputs. The Commission should reject this merger because it would result in too much power in the hands of one company.”

The proposed collaboration of the two cable television majors has been under extreme scrutiny since it was announced last February.

If the deal is strike between both the parties, Comcast would become the leading cable and internet provider in the US.

 

AT&T to pay FCC USD 25 million fine to settle customer data breach

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The Federal Communications Commission (FCC) on Wednesday asked wireless carrier AT&T Inc to pay a whopping amount of USD 25 million in order to settle the case over a consumer data breach at its call centers in Colombia, Mexico and the Philippines.

According to the US communications regulator, the user data breaches led to the unauthorized revelation of names and partial or full numbers related to Social Security and also illegal access to personal account information of nearly 280,000 AT&T customers in the United States. The data were breached between 2013 and 2014.

“Unfortunately, a few of our vendors did not meet that standard and we are terminating vendor sites as appropriate. We’ve changed our policies and strengthened our operations,” AT&T said in a statement.

A senior FCC official told reporters that the data was used by call center staffs for requesting handset-unlock codes for the AT&T phones and shared with third parties, who appeared to have been trafficking the cell phones that were stolen.

According to the FCC official, the civil penalty worth USD 25 million that has been levied on the number two wireless carrier of the United States is the largest data security enforcement action to date by the federal regulatory body.

In October 2014, the federal body had imposed a fine worth USD 10 million on telecom firms, including YourTel and TerraCom, for consumer privacy breaches.

Two broadband firms challenges FCC over net neutrality rules in lawsuit

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In less than two weeks after the Federal Communications Commission (FCC) introduced its new rules for net neutrality, American broadband providing companies have filed lawsuits against the regulatory body in an attempt to overturn the recently passed regulations for monitoring Internet traffic.

Industry trade group USTelecom Association and Internet service provider Alamo Broadband challenged the new set of net neutrality rules in different lawsuits against FCC.

USTelecom Association, the trade group representing some of the country’s largest Internet service providers, on Monday filed a lawsuit in the US Court of Appeals for the District of Columbia, claiming that the actions of the federal regulatory body is a violation of federal commandment and also “arbitrary, capricious and an abuse of discretion.”

Walter McCormick, president of USTelecom, in a statement said, “We do not believe the Federal Communications Commission’s move to utility-style regulation invoking Title II authority is legally sustainable.”

Making similar arguments, Texas-based Alamo on Monday challenged the FCC’s action in a federal appeals court in New Orleans.

Both the cases are the first legal moves taken by the Internet-based companies against the new rules for net neutrality, which were approved by a 3-2 vote in February after a long term debate.

The newly passed rules forbid broadband service providers from slowing down or blocking Internet traffic on wired and wireless networks. The rules also ban ISPs from providing paid priority services that could enable them to charge content firms, like Netflix, fees to access “Internet fast lanes” to reach consumers more instantly when networks are congested.

Meanwhile, a spokesperson of FCC termed the lawsuits “premature and subject to dismissal”.

 

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