The FCC killed the huge merger between Time Warner Cable and Comcast, but that doesn't mean all of that merger talk is done for good. Time Warner is now a part of a $56 billion proposed super merger that would create another huge cable and Internet company. Critics say this merger will further limit competition in the cable TV and Internet industry.
This time around, Charter Communications is the company offering to buy Time Warner. If the proposed merger goes through, the resulting company would control 20% of the nation's broadband Internet market.
The deal is likely to run into the same scrutiny from the FCC that ended up dooming the Comcast merger. That's because it could limit consumer choices in the broadband and cable market.
A Charter bid for Time Warner Cable would likely be approved by the Justice Department’s Antitrust Division but could face conditions at the Federal Communications Commission, said Gene Kimmelman, who worked at the Justice Department. The union would create a company smaller than Comcast, he said.
Both Time Warner and Charter argue that a merger would be good for consumers. They say that it will result in faster Internet speeds, more public Wi-Fi and better access to broadband. It could also allow the company to create a video streaming service to compete with Netflix, Amazon Prime, Hulu and others.
“It’s more of an FCC focus and there they have still a heavy lift. Will cable prices go up? Will broadband prices go up?” said Kimmelman, now president of the public interest group Public Knowledge. He added that the regulators’ review would also focus on developing internet video competition.
If the deal goes through, the combined company would control large market shares in New York, Texas and California. It would also have a foothold in Florida, because cable and broadband provider Bright House is also a part of the proposed deal.