Reports that several state attorneys general will examine...
Reports that several state attorneys general will examine Comcast’s plan to buy Time Warner Cable alongside the Department of Justice don’t affect the likelihood of the deal being approved, said Guggenheim Partners analyst Paul Gallant in an email to investors…
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Wednesday. “States rarely diverge from DOJ,” Gallant said, though state officials may pressure Justice to impose tougher conditions. “The chances of state pressure being effective probably rise if New York is part of the mix,” Gallant said. “NY is considered to have a particularly effective antitrust division and could make some noise.” The FCC is a “higher hurdle” for Comcast/Time Warner Cable “because the merger does not appear to present any traditional antitrust concerns,” Gallant said. “The key regulatory review is the FCC’s public interest evaluation, which examines competitive effects but also includes diversity and localism.” Risks to the deal could come from extensive political opposition or “unexpectedly problematic” transaction conditions imposed by the FCC, Gallant said. Before joining the FCC, Chairman Tom Wheeler “said merger conditions can be a good way to advance important policies,” Gallant said. “For now, the most important thing to watch will be the congressional reaction to the merger, and then the filings made at the FCC by opponents of the deal.” Comcast is expected to get municipal and state approval for franchise transfers as part of the approximately $45 billion deal (CD Feb 24 p16).