Corporate Law Blog

Cable merger prospects not looking good after FCC meeting

Nobody ever said—or should have said—that navigating a merger is an easy project. That has certainly proven to be the case for the proposed Comcast-Time Warner Cable merger. As we wrote back in December, the merger proposal has had a particularly difficult time here in Kentucky, with some local markets putting up resistance and ultimately rejecting the deal on various grounds.

The merger deal has also met with serious resistance from federal regulators as well. This week, the Federal Communications Commission—the agency which regulates interstate communications by radio, wire, satellite, television and cable—apparently met with the companies and, according to sources, is poised to reject the merger on the grounds that it would not be helpful for consumers. 

The Federal Communications Commission, in approving deals like the Comcast-Time Warner merger, looks to whether the proposal would serve the public interest, as well as the factors of convenience and necessity. Communications companies who propose a merger have the burden of proving that he deal is in the public interest. The FCC doesn’t rubber stamp mergers, so this isn’t always an easy thing to do.  

The Federal Communications Commission’s positioning with respect to the cable deal likely means that it is the end of the line for the merger. Without the agency’s approval of the deal, Time Warner and Comcast have no ability to acquire each other company’s FCC license. A lot of the subsidiary agreements that supported the merger will consequently come to nothing.

Successfully seeing a merger through to the end is not something companies have to do on their own. Working with the guidance of experienced legal counsel, companies can come up with a sensible plan that increases the chances of a merger’s success.