Skepticism over the proposed merger between Comcast Corporation (NASDAQ:CMCSA) and Time Warner Cable Inc (NYSE:TWC) continues to soar in the wake of reports that US antitrust lawyers are against the merger. The two stocks closed the week on a low as pressure continued to mount from small players who are against the deal, which they believe could result in a form of monopoly consequently hurt the level of competition. Speaking on Fox Business S&P Media analyst, Tuna Amobi affirmed his strongest belief that it will not be a surprise if the deal falls through altogether.
Time Warner Cable Inc (NYSE:TWC) may have said that it has been working closely with the Department of Justice which has not given any indication of blocking the deal. But the thousands of comments from the public objecting the deal could weigh in on the final decision.
“The opponents of this deal have been extremely vocal. I think what is really interesting here is that the handwriting has actually been on the wall for quite while right now with the way the clock for this deal has been pushed back quite a few times,” said Mr. Amobi.
Scrutiny can only intensify heading into the final decision as the FCC tries to analyze whether the merger will have a catalytic effect in harming competition in the broadband space. Comcast Corporation (NASDAQ:CMCSA) on its part affirms that the deal will work for the betterment of the industry in terms of faster broadband speeds.
The FCC is divided on whether to approve a deal that unites two of the largest cable operators in the U.S that would wield too much power compared to other players in the space. Comcast and Time Warner could end up controlling nearly 35 to 50% of the country’s broadband internet space if the deal is approved.
“What this illustrates is that the environment, the current environment is not that conducive to a mega-merger like this especially coming at a time when the FCC is trying to clamp down on priorities in relation to internet traffic titled to regulations,” said Mr. Amobi.
The FCC may end up formulating a number of conditions that Comcast will have to adhere to if the acquisition of Time Warner Cable Inc (NYSE:TWC) are to be approved. Some of which may be too hard for the wireless giant to digest.
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