Analysis: Failure of Comcast-Time Warner deal may spark new wave of mergers

The demise of the Comcast Corp.-Time Warner Cable Inc. merger doesn’t mark an end to the consolidation of the cable and Internet-provider market — analysts are saying it’s likely the beginning of what will be a new rush of mergers that will make an already consolidated market more so and likely cause prices to rise.

Comcast, the largest cable and Internet provider in the United States, announced today that it was dropping its $45 billion bid for Time Warner Cable, the second-largest cable and Internet provider. The Justice Department, which was analyzing the deal’s effect on competition, had raised concerns about the combined company controlling 57 percent of household Internet connections nationwide, making it “an unavoidable gatekeeper for Internet-based services.”

The decision followed a move by the Federal Communications Commission to turn the matter over to an administrative law judge to rule on the merger, which effectively would have killed the deal. FCC Chairman Tom Wheeler said Comcast’s decision was “in the best interests of consumers.”

While the mega-merger failed, cable companies have indicated a series of smaller mergers are likely shrinking what is already a consolidated industry. Charter Communications Inc., which was close to acquiring Time Warner Cable before Comcast stepped in with a better deal, has said it would go after Time Warner Cable again.

Charter, which is in a distant third place among cable providers, had struck a $10 billion deal to buy cable and Internet-provider Bright House Networks LLC, which mostly offers service in central Florida, parts of Alabama and around Indianapolis. But it is possible Charter could end up buying both Time Warner Cable and Bright House.

Cox Communications Inc. also may look to purchase other cable companies.

Related: How broadband providers seem to avoid competition

There’s more to this story. Click here to read the rest at the Center for Public Integrity.

This story is part of Broadband. Investigating the political power of the information technology industry. Click here to read more stories in this investigation.

Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.