A combined Comcast-AT&T Broadband would likely be approved by federal regulators even though it would create the largest cable company in the country, surpassing AOL-Time Warner, industry observers say.
“The Bush administration has given every conceivable signal that it’s not going to be especially tough on mergers like Comcast-AT&T,” said Consumers Union spokesman David Butler.
Also boding well for the companies: A federal appeals court recently struck down the 30 percent cable ownership cap.
That removes any restrictions on a cable company’s reach until the Federal Communications Commission adopts a new limit, which may be higher than 30 percent.
Even if the 30 percent cap were in place, a combined Comcast-AT&T could meet it after making some divestitures.
Jeff Chester, executive director of the Center for Digital Democracy, opposes such a union. “This is really a deal about further monopolizing the Internet,” he said.
He said it would be jeopardize open access for competing Internet service providers and interactive television because the new company would wield tremendous market power.
“It is an Orwellian vision of tight control over our nation’s communications system,” he said.
Consumers Union hasn’t decided whether to oppose the acquisition but has plenty of concerns. Mr. Butler thinks the new company could “make or break” television programmers by forcing them to alter their shows or forego carriage on its cable systems. At the very least, he would want conditions imposed on the deal to protect ISPs, programmers and competing services.
Comcast has been criticized by some for not sharing its Philadelphia-area sports programming with satellite TV competitors. The company says it has every right to enter into exclusive content deals because dish TV companies, such as DirecTV, do the same.
Senate Commerce Committee Chairman Ernest Hollings, D-S.C., is taking a wait-and-see attitude.
Rep. Billy Tauzin, R-La., chairman of the House Energy & Commerce Committee, is concerned about industry consolidation and program access but does not oppose this deal.
“The Justice Department is going to keep a close eye on [this],” said his spokesman Ken Johnson.
The FCC as well as Justice or the Federal Trade Commission, would review the acquisition if it takes place, sources said. The FTC would examine competitive issues. Justice would review antitrust concerns, and the FCC would consider mostly license transfers.