(WSJ) The Comcast-Time Warner Megadeal: Out of Chaos, More Chaos

While Comcast says it will divest three million of TWC’s roughly 11 million subscribers, the merged company will still have about 30 million video subscribers, far ahead of the next biggest pay-TV operator, DirecTV which has about 20 million. It will have a big presence in the northeastern U.S., in particular, including in the New York area where TWC is a major cable provider now. Perhaps more important, Comcast will be by far the dominant provider of broadband services, which DirecTV doesn’t offer. In early December, Aji Pai, a Republican commissioner at the Federal Communications Commission, said the Obama administration would be unlikely to approve a Comcast-TWC merger, given its track record of reviewing big mergers.

Regardless of the regulatory outcome, the deal is likely to reinforce a consolidation trend. Liberty and Charter executives have argued that greater scale would better enable cable operators to compete by, for instance, being able to work together on programming ventures. Mr. Malone has said cable operators, because they don’t operate nationally, can’t buy programming on a national basis and often lack the scale in invest in research and technology.

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