Comcast wasted 14 months, hundreds of millions of dollars and a lot of what was left of its good name in its failed $45.2 billion attempt to acquire Time Warner Cable.
First proposed in February 2014, the deal fell apart in the regulatory process, with both the Justice Department and the FCC convincing Comcast to walk away in April 2015, telling the cable giant they’d fight against, and delay, approval for years to come.
Hindsight on regulatory outcomes is, of course, 20/20 vision. Early on, pessimists pointed at AT&T’s previously scuttled attempt to buy T-Mobile for $39 billion as a damning precedent. Comcast made the assumption that since it wasn’t buying a competing asset in TWC (the two companies operate in different markets), it wouldn’t have the same antitrust concerns.
But just three years after it closed on a major media conglomerate in NBCUniversal, Comcast can reasonably be accused of failing to read the room.
For one, the FCC was under the watch of Democratic Chairman Tom Wheeler, who was just beginning at the time to unfurl an agenda that would soon lead NCTA President Michael Powell to declare that the cable industry was under “relentless government assault.”
Not only was Wheeler in charge at the FCC, but then-U.S. Attorney General Eric Holder was certainly not the kind of rubber stamp for huge corporate mergers that we appear to have in office today.
Comcast probably didn’t look at its specific circumstances closley enough. Might the federal government be concerned about the two biggest cable companies merging into a force that had nearly 32 million wireline broadband customers—about twice as many as nearest competitor AT&T?
Given Comcast’s oppositional relationship at the time with OTT players like Netflix, wouldn’t regulators also be concerned about how such a powerful broadband company might hinder growth of the online video market?
There was also a question as to whether regulators were even comfortable yet with Comcast’s compliance on its NBCU conditions.
And there was Comcast’s burgeoning reputation for bad customer service, which hit a tipping point in the summer of 2014 when several embarrassing subscriber interactions went viral.
It would have been a blockbuster merger, but it clearly faced significant challenges.