Charter Communications’ (CHTR) $78.7 billion agreement to buy Time Warner Cable (TWC) comes right on the heels of Comcast (CMCSA) being forced to cancel its plans to buy the very same company in the face of opposition from federal regulators. Bill McConnell, assistant managing editor for The Deal, weighs in on whether Charter’s offer stands a chance in Washington. McConnell acknowledges that the Federal Communications Commission as well as the Department of Justice, both of which must approve the deal, will likely be concerned about increased concentration in the broadband arena and cable television delivery. The proposed merger between Charter and Time Warner Cable would be much smaller than if Comcast had acquired the company, something, McConnell says bodes in Charter’s favor with regulators. He notes that Comcast is already the largest cable and broadband provider by far and buying Time Warner Cable would have given it control of 57% of the broadband market, 30% of the cable market and dominance in 19 of the 20 largest metro areas. A tie-up between Charter and Time Warner Cable would result in a combined company that serves less than 30% of broadband customers and only 17% of pay-TV customers, giving it a much better chance of assuaging regulators’ antitrust concerns.
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