Comcast has officially abandoned its $45 billion merger with Time Warner Cable, after encountering resistance from regulators. "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," said Comcast Chairman and CEO Brian Roberts in a statement. "Comcast NBC Universal is a unique company with strong momentum. Throughout this entire process, our employees have kept their eye on the ball and we have had fantastic operating results. I want to thank them and the employees of Time Warner Cable for their tireless efforts. I couldn't be more proud of this company and I am truly excited for what's next."
Comcast and Time Warner Cable, the two largest cable and broadband companies in the US, announced the merger last February. Despite their size, Comcast argued that the two served different enough markets that customers would not notice a drop in competition. It also agreed to spin off some Time Warner Cable subscribers, keeping its ownership of the US cable TV market under 30 percent. Nonetheless, the resulting company was likely to control a significant portion of the US broadband market. The proposal was rumored to have died earlier this week after the companies met with the FCC and Justice Department, both of whom expressed concerns about the power of a combined Comcast and Time Warner Cable. On Wednesday, the FCC apparently suggested a "hearing designation order" that could delay or kill the deal, and Comcast's stake in Hulu (acquired through its merger with NBC Universal in 2011) reportedly concerned the Justice Department.
"The proposed merger would have posed an unacceptable risk to competition and innovation."
FCC chair Tom Wheeler has since issued a statement about the decision:
"Comcast and Time Warner Cable's decision to end Comcast's proposed acquisition of Time Warner Cable is in the best interests of consumers. 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.
Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers.
I am especially proud of our close working relationship throughout the review process with the Antitrust Division of the Department of Justice. Our collaboration provided both agencies with a deeper understanding of the important issues of innovation and competition that the proposed transaction raised."