It’s over. Comcast formally withdrew itself from its pending $45 billion merger with Time Warner Cable on Friday morning after encountering resistance from regulators.
A combination of the No. 1 and No. 2 U.S. cable companies would have put nearly 30 percent of TV and about 55 percent of broadband subscribers under one roof, giving the resulting behemoth unprecedented power over what Americans watch and download.
Competitors, consumer groups, and politicians have outrightly criticized the deal, saying it would lead to higher prices and less choice.
Federal Communications Commission Chairman Tom Wheeler said in a written statement
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.
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.
Bloomberg reported yesterday that the deal might die, following signs of opposition from the Justice Department and Federal Communications Commission. (Senator Al Franken actually wrote a post for TechCrunch earlier this week outlining his opposition to the deal.
The Wall Street Journal reported that Time Warner Cable was already pursuing a “Plan B” in case the deal fell through.
Here’s what Comcast Chairman and CEO Brian Roberts said in a statement
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. 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.
The deal would have given Comcast millions of subscribers in cities like New York and Los Angeles. With those subscribers would have come more influence over the future of the television and broadband markets.
The death of the deal leaves a series of questions about what happens next, and has analaysts rather excited regarding Comcast’s $45 Billion which its didn’t end up spending.
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