FCC gears up review of Comcast takeover of Time Warner Cable
Comcast Corp.'s proposed $45-billion takeover of Time Warner Cable is receiving new scrutiny amid protests from consumer groups who are demanding state and federal regulators block Comcast’s ambitions to grow.
The Federal Communications Commission on Thursday asked Comcast to provide detailed business information about its cable TV systems, its Internet service and arrangements that Comcast has with outside companies that deliver Internet traffic to Comcast’s already vast network.
The government is not expected to decide whether to approve the proposed merger between the nation’s No. 1 and No. 2 cable companies until January. However, the FCC has picked up the pace of its review of the complex transaction.
Monday is the deadline for individuals to file comments with the regulatory group regarding the proposed merger.
On Friday, the FCC denied Los Angeles Mayor Eric Garcetti’s request to extend the deadline for comments until Sept. 8. The mayor’s office had asked the FCC for an extension because of the complexity of the transactions.
The merger has huge ramifications for residents in the Los Angeles region, as approximately 1.8 million homes would see a switch in their pay-TV or Internet service provider. Garcetti mentioned the importance of Los Angeles as another reason to extend the comment period.
The FCC on Thursday filed its 50-page request for business information from Comcast. Among other things, the FCC requested that Comcast explain how the proposed Time Warner Cable transaction would result in “cost savings and other synergies worth approximately $1.5 billion,” according to the public filing.
Comcast has told investors that the move would lead to cost savings and benefits to consumers.
The FCC also wanted to know whether Comcast has lived up to the terms of a 2011 agreement that the Philadelphia-based cable giant signed to win the federal government’s blessing of its acquisition of media company NBCUniversal.
The agency also appeared to be intensely interested in how Comcast manages its broadband Internet networks and any priorities given to other companies that transmit data to Comcast customers.
The FCC set a Sept. 11 deadline for Comcast to provide the information.
Satellite TV giant Dish Network, and some groups, including the Los Angeles Latino Chamber of Commerce, already have voiced their opposition to the deal.
“A merger of Comcast and Time Warner could create a Frankenstein we can’t control, with skyrocketing prices and plummeting service,” Robert Weissman, president of the consumer activist group Public Citizen, said in a Friday email designed to rally opposition.
On the opposite side of the spectrum, the mayors of 52 cities -- including Anaheim -- have supported Comcast’s proposed purchase of Time Warner Cable. Comcast announced the proposed merger in February.
Comcast said it welcomed the inquiries.
“This is just another standard step in the review process, and we look forward to continuing to work with the commission as the process moves forward,” Sena Fitzmaurice, Comcast’s vice president of government communications, said.
Separately, the California Utilities Commission plans to also review the proposed union between the largest Internet service provider in Northern California (Comcast) with the largest provider in Southern California (Time Warner Cable).
In a recent order, the PUC said it would explore Comcast’s plans for building out the state’s Internet network as well as its plans for serving public schools and low-income neighborhoods.
The PUC said it would ask such questions as: “Will the merger benefit low income outreach and the adoption of broadband services that are accessible, affordable and equitable in a manner that is enforceable and will help close the digital divide?”
Comcast currently has 22 million cable TV customers, and 21 million high-speed Internet customers.
The proposed takeover of Time Warner Cable would give Comcast nearly 30 million cable and Internet service homes in the U.S. The company would add Los Angeles, New York and Dallas to its coverage area.
Those three metropolitan areas are served currently by Time Warner Cable. In the Los Angeles region, Comcast has also proposed picking up customers in Long Beach, Burbank and other areas who now receive their service from Charter Communications.
If the deal is approved, Comcast would become the dominant pay-TV provider in the Los Angeles region.
Consumer groups fear that a bulked-up Comcast would become too powerful of an Internet gatekeeper because it would control high-speed Internet service to about 40% of all homes in the U.S. with broadband service.
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