WebProNews

Tag: mergers

  • Lawmakers Introduce Bills to Ban Mergers Over $5 Billion

    Lawmakers Introduce Bills to Ban Mergers Over $5 Billion

    US Senator Elizabeth Warren and Representative Mondaire Jones have introduced bills to ban corporate mergers over $5 billion.

    Mergers have become an increasingly major concern for lawmakers, in both the US and the EU. Big Tech, in particular, has come under scrutiny, with many mergers being viewed as anticompetitive. Various measures have been proposed, but new bills — Prohibiting Anticompetitive Mergers Act — by Warren and Jones may be the most aggressive yet, proposing a total ban on mergers over $5 billion.

    The bills would give the Federal Trade Commission (FTC) and the Department of Justice (DOJ) the power to block mergers without needing a court order. The two agencies would also be given the power to undo mergers they deem harmful.

    “For the last five decades, big companies have had almost free reign over our economy, squashing competitors, growing bigger and bigger, and abusing their market power to price gouge consumers and crush workers and small businesses. This unconstitutional behavior has to stop. My new bill with Rep. Jones would restore our country’s anti-monopoly tradition by banning the biggest, most anticompetitive mergers and giving the DOJ and the FTC stronger tools to enforce our antitrust laws and restore real competition in our markets. Congress needs to take bold action to bring down prices for families and promote a fairer economy for all Americans, and our bill would do just that,” said Senator Warren.

    “In 2021, our antitrust agencies received more merger filings than in any other year during the last decade,” said Congressman Mondaire Jones. “From major tech mergers between companies like Facebook and Instagram to agriculture mergers between companies like Wayne and Sanderson Farms, the recent rise in corporate consolidation has increased unemployment, suppressed wages, and allowed companies to hike up prices even further during this period of inflation. It’s why we need the Prohibiting Anticompetitive Mergers Act, which I’m proud to introduce with Senator Elizabeth Warren. Our bill would empower workers, raise wages, reduce prices, combat inequality, and enable small businesses to thrive. By banning the biggest, most anticompetitive mergers, overhauling the merger-review process to include consideration of labor-market consequences, and strengthening agencies’ tools to break up harmful mergers, our bill will tackle corporate consolidation head on and help build a fairer, more vibrant economy that works for everyone.”

    In just the last few weeks, Microsoft announced plans to acquire Activision Blizzard for $68.7 billion, and Google is purchasing Mandiant for $5.4 billion. Similarly, Amazon is purchasing MGM for $8.45 billion. If the bills should pass, these deals could be on the chopping block, or undone after the fact.

  • Biden Executive Order to Target Increased Competition

    Biden Executive Order to Target Increased Competition

    President Joe Biden is signing an executive order aimed at increasing competition in the US market.

    Consolidation has been a major force in the American market for decades. Mom and pop shops have steadily been forced out as entire industries have become dominated by a handful of major players. According to the Biden administration, this consolidation and lack of competition costs American families some $5,000 per year.

    That lack of competition drives up prices for consumers. As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripled. Families are paying higher prices for necessities—things like prescription drugs, hearing aids, and internet service.

    To address the problem, President Biden is preparing to sign an executive order that would involve more than a dozen federal agencies and 72 initiatives aimed at tackling the problem across multiple industries.

    The action is expected to benefit the labor market, healthcare, transportation, shipping, agriculture, internet access, banking and finance, as well as increase competition in the tech industry by adding additional scrutiny of mergers and acquisitions.

  • Alibaba Buys ‘China’s YouTube’ for $3.7 Billion

    Alibaba Buys ‘China’s YouTube’ for $3.7 Billion

    Alibaba has announced that it has acquired Youku Tudou for around $3.7 billion.

    Youku Tudou is commonly referred to as “China’s YouTube”. E-commerce giant Alibaba had previously offered a little less to purchase the company last October.

    Alibaba already owned about a fifth of Youku Tudou.

    “We believe this combination with Alibaba maximizes value for Youku Tudou shareholders and significantly benefits our customers, users and team,” said Victor Koo, Chairman and Chief Executive Officer of Youku Tudou. “We are eager to work with Alibaba to grow our multi-screen entertainment and media ecosystem. We are confident that we will strengthen our market position and further accelerate our growth through the integration of our advertising and consumer businesses with Alibaba’s platform and Alipay services. With Alibaba’s support, Youku Tudou’s future as the leading multi-screen entertainment and media platform in China has been firmly secured.”

    Youku Tudou is one of China’s biggest video platforms, counting over a half a billion users.

    Alibaba reported strong earnings last month, beating Wall Street expectations as its revenue jumped 32% to $3.5 billion.

  • Candy Crush Maker King Now a Part of Activision Blizzard

    Candy Crush Maker King Now a Part of Activision Blizzard

    Activision Blizzard, whose titles include the Call of Duty Series, Destiny, and World of Warcraft, has agreed to acquire King Digital Entertainment for $5.9 billion.

    King Digital is best known as the makers of the Candy Crush games.

    Activision says that this merger creates “one of the largest entertainment networks with over half a billion monthly active users in 196 countries” and a combined portfolio to of 10 the “world’s most iconic interactive entertainment franchises.”

    “We have long-admired King for consistently creating incredibly fun, deeply engaging free-to-play games that capture the imaginations of players across ages and demographics,” said Bobby Kotick, Chief Executive Officer of Activision Blizzard. “Activision Blizzard will provide King with experience, support and investment to continue to build on their tremendous legacy and reach new potential. We share an unwavering commitment to attracting and developing the best talent in the business, and we are excited about what we will be able to accomplish together.”

    “We are excited to be entering into this Acquisition with Activision Blizzard. Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises. We believe that the Acquisition will position us very well for the next phase of our company’s evolution and will bring clear benefits to our players and employees. We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide. We are very much looking forward to working with Activision Blizzard. We have two teams that, together, will have an amazing footprint, innovative technology, and leadership across platforms, and unique, established IPs to delight one of the largest networks of players in the world,” said Riccardo Zacconi, Chief Executive Officer of King.

    According to the company, spending on Candy Crush fell 13 percent year-over-year. King has been unable to create a hit as huge as Candy Crush.

    Mark Zuckerberg recently said that Facebook was working on a fix to the abundance of Candy Crush invites.

    Image via Candy Crush

  • AT&T / DirecTV Deal Gets Thumbs Up from FCC, with Conditions

    AT&T / DirecTV Deal Gets Thumbs Up from FCC, with Conditions

    After “careful, thorough review,” the Federal Communications Commission has given AT&T and green light to acquire DirecTV. The combined entity will boast about 26 million customers. Say hello to the new largest pay TV company in the US.

    The approval didn’t come without conditions, however.

    Here are all of the conditions the FCC placed on AT&T. They involve the expansions of AT&T’s broadband service –especially in underserved areas, as well as bits about interconnection disclosure and discriminatory usage-based practices. These are the parts that likely satisfied Netflix, which put its backing behind the merger earlier this month.

    – Fiber to the Premises (FTTP) Deployment. Recognizing that the merger reduces AT&T-DIRECTV’s incentive to deploy FTTP service, the Commission adopts as a condition of this merger the expansion of FTTP service to 12.5 million customer locations. This condition also responds to the harm of the loss of a video competitor in areas where AT&T and DIRECTV had directly competed before the merger by providing a pathway for increased competition from services that rely on broadband Internet to deliver video.

     

    – Gigabit Service to E-rate Eligible Schools and Libraries. In addition, to ensure that schools and libraries also benefit from expanded fiber deployment to consumers and institutions, the Commission is also requiring AT&T-DIRECTV to offer gigabit service to any E-rate eligible school or library where AT&T-DIRECTV deploys FTTP service.

     

    – Non-Discriminatory Usage-Based Practices. Recognizing that AT&T is the only major ISP that applies “data caps” across the board to all of its fixed broadband customers and that this merger increases the incentive of AT&T-DIRECTV to use strategies that limit consumers’ access to online video distribution services in order to favor its own video services, the Commission requires AT&T-DIRECTV, as a condition of this merger, to refrain from imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband Internet service.

     

    – Internet Interconnection Disclosure Requirements. Recognizing the importance of interconnection to the operation of online video services, the Commission also requires as a condition of this merger that AT&T-DIRECTV submit its Internet interconnection agreements so that the Commission may monitor the terms of such agreements to determine whether AT&T-DIRECTV is denying or impeding access to its networks in anticompetitive ways through the terms of these agreements.

     

    – Discounted Broadband Services for Low-Income Subscribers. While finding that the availability of better and lower priced bundles of video and broadband service is a potential benefit of the merger, the Commission also concludes that the public interest requires us to ensure that a bundle of video and broadband services is not the only competitive choice for low-income subscribers who may not be able to afford bundled services. The Commission accordingly requires as a condition of the merger that AT&T-DIRECTV make available an affordable, low-price standalone broadband service to low-income consumers in its broadband service area.

     

    – Compliance Program and Reporting. Given the important role that these conditions serve in securing the public interest benefits of the merger, the Commission requires that AT&T-DIRECTV retain both an internal company compliance officer and an independent, external compliance officer that will report and monitor, respectively, the combined entity’s compliance with all conditions of the merger.

    Now that the FCC has given the green light, the nearly $49 billion merger is a go. The US Justice Department recently concluded that the deal was not anti-competitive.

    “After an extensive investigation, we concluded that the combination of AT&T’s land-based internet and video business with DirecTV’s satellite-based video business does not pose a significant risk to competition,” said Assistant Attorney General Bill Baer of the Antitrust Division. “Our investigation benefitted from the Division’s close and constructive working relationship with the FCC. The commitments that the proposed FCC order includes, if adopted, will provide significant benefits to millions of subscribers.”

  • AT&T, DirecTV Merger Reportedly Nearing Approval

    AT&T, DirecTV Merger Reportedly Nearing Approval

    It appears to be smooth sailing for AT&T in its acquisition of DirecTV, as the merger has reportedly cleared one major hurdle and is about to clear the last.

    Reuters reports that the Department of Justice has already wrapped up its review of the deal. Bloomberg says that the DoJ imposed no conditions on the mega-merger.

    AT&T first agreed to acquire DirecTV for nearly $49 million last May.

    The DoJ’s job in merger reviews is to determine if the deals violate antitrust law – so it looks like AT&T and DirectTV are good on that front. Of course, the DoJ isn’t the only regulatory agency that the companies must assuage. They also have to worry about the Federal Communications Commission and its independent review of whether or not the deal serves the public interest.

    Reuters says that approval is coming very soon – as early as next week. It’s more likely that AT&T had to make concessions with the FCC.

    On June 29th, AT&T said it had had a talk with the FCC, wherein they discussed “the substantial, direct, and verifiable benefits that the AT&T/DIRECTV merger will deliver to tens of millions of consumers.”

    “We also discussed AT&T’s voluntary commitments, described in the record, which will provide the Commission with further assurance that the transaction will serve the public interest and deliver benefits to consumers.”

    Streaming video may play a part in said conditions. Netflix recently raised objections to the merger in its current form, saying that the deal “would result in a combined entity with increased incentive and ability to harm online video distributors and other edge-based Internet content that Applicants view as a threat to their broadband and video programming businesses.”

    The merger would create the biggest pay-TV company in the country.

    It’s possible that AT&T will have to agree to some stipulations protecting online video companies.

    The AT&T/DirecTV deal won’t create the broadband-controlling monster that the Comcast/Time Warner Cable deal would’ve created. The FCC basically killed that deal, and Net Neutrality was a major concern.

  • Now Charter Communications Is Going To Buy Time Warner Cable

    Now that Comcast’s acquisition of Time Warner Cable has fallen apart, Charter Communications has swooped in to attempt an acquisition of TWC.

    In February, Comcast announced its intent to acquire the other cable giant, but that deal officially died in April as Comcast abandoned its efforts following reports that the Department of Justice and Federal Communications Commission were to recommend against the deal. It ended up costing Comcast roughly $336 million to not acquire Time Warner Cable.

    As soon as that deal fell apart, reports were already pouring out, indicating that Charter Communications was ready to move on TWC. That became official on Tuesday as the two companies co-announced Charter’s intent to merge with TWC and acquire Bright House Networks. The deal values Time Warner Cable at $78.7 billion with Charter providing $100 in cash and shares of a new public parent company (New Charter) equivalent to 0.5409 shares of CHTR for each Time Warner Cable share outstanding. This values TWC shares at about $195.71 based on Charter’s market closing price on May 20.

    Charter will acquire Bright House Networks for $10.4 billion as part of an amended agreement, which was originally announced in March. New Charter will own between 86% and 87% of Bright House while parent Advance/Newhouse will own between 13% and 14%.

    The combination of Charter, Time Warner Cable and Bright House will serve 23.9 million customers in 41 states.

    “The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry. Representatives of each of these companies have invented some of the most revolutionary communications products ever created; innovations like video on demand, VOIP phone service, remote storage DVR, cable TV through an app, downloadable security and the first backward-compatible, cloud-based user interface. That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies,” said Charter Communications CEO Tom Rutledge. “With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace. New Charter will capitalize on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.”

    “With today’s announcement, we have delivered on our commitment to maximizing shareholder value,” said Time Warner Cable CEO Robert D. Marcus. “This agreement recognizes the unique value of Time Warner Cable, and brings together three great companies that share a common philosophy of strong operations, great products, robust network investment and putting customers first. This combination will only accelerate the great operating momentum we’ve seen over the last year and provide enormous opportunities for our 55,000 dedicated employees. We remain wholly committed to bringing the very best experience to our residential and business customers coast to coast.”

    “Today’s announcement is good news for customers and potential customers, as well as our employees, since we will be in a stronger position to deliver competitive services, invest in advanced technology, and develop innovative products that will compete with global and national brands,” said Bright House CEO Steve Miron. “In addition, I am very pleased that Tom Rutledge will be the CEO of the new company. Tom recognizes the importance of placing a high priority focus on customer care drawing from the expertise of all three companies, and I believe this will be a strong pillar of the new company’s culture.”

    Tom Rutledge will serve as President and CEO of New Charter with the offer of a new five-year employment agreement. He will also be offered the position of Chairman of the Board, which will consist of 13 directors. The other 12 will consist of

    7 independent directors nominated by the independent directors serving on Charter’s Board of Directors, 2 designated by Advance/Newhouse, and 3 designated by Liberty Broadband. Charter’s current Chairman Eric Zinterhofer, will continue to serve on New Charter’s Board.

    Image via Consumerist, Flickr Creative Commons

  • The AT&T/DirecTV Merger Will Likely Be Approved: Report

    The AT&T/DirecTV Merger Will Likely Be Approved: Report

    It doesn’t appear that federal regulators are going to stand in the way of AT&T’s bid to acquire DirecTV.

    According to sources quoted in the Wall Street Journal both the Justice Department and the Federal Communications Commission are almost done with their respective reviews, and they are both unlikely to block the deal.

    AT&T agreed to acquire DirecTV for nearly $49 million last May.

    From the WSJ:

    Regulators could still decide to impose conditions on the deal, which would create the largest U.S. pay TV company, but don’t appear to have serious concerns, the people said. Final approval could still be weeks away.

    The Justice Department hasn’t raised issues with the deal and doesn’t plan to block it, the people said. FCC staff are inclined to recommend the commission approve the deal with conditions, but none are expected to be unacceptable to AT&T, people familiar with the process have said.

    Streaming video may play a part in said conditions. Netflix recently raised objections to the merger in its current form, saying that the deal “would result in a combined entity with increased incentive and ability to harm online video distributors and other edge-based Internet content that Applicants view as a threat to their broadband and video programming businesses.”

    “AT&T already has a demonstrated ability to harm OVDs by leveraging its control over interconnection to degrade its own customers’ access to Netflix’s service. AT&T also has shown an interest in using data caps and usage-based pricing methods, which it can apply discriminatorily to advantage its own services. If AT&T is able to slow the development of the
    OVD industry, either by foreclosing access to broadband customers or imposing discriminatory data caps, AT&T would be able to preserve its market advantage by slowing or even reversing the shift toward competitive online video offering and away from bundled video/broadband offerings,” said Netflix in a recent letter to the FCC.

    It’s possible that AT&T would have to agree to some stipulations protecting online video companies.

    “This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens – mobile devices, TVs, laptops, cars and even airplanes. At the same time, it creates immediate and long-term value for our shareholders,” said AT&T Chairman and CEO Randall Stephenson upon announcing the merger.

    The AT&T/DirecTV deal, while significant, won’t create the broadband-controlling beheomth that the Comcast/Time Warner Cable deal would’ve birthed. The FCC played a role in killing that deal, and Netflix and Net Neutrality was a major concern.

    Image via Keith Allison, Flickr Creative Commons

  • Netflix Doesn’t Like the AT&T/DirecTV Merger

    Netflix Doesn’t Like the AT&T/DirecTV Merger

    If AT&T’s proposed merger of DirecTV is approved, it would create the largest pay-TV provider in the country.

    And according to Netflix, the merger in its current form is bad for everyone.

    The streaming company has written a letter to the Federal Communications Commission, urging it to reject the merger “as currently proposed.”

    “The proposed merger would make AT&T the largest MVPD in the country, and potentially lead to its becoming the largest ISP in the country as well. Such market power creates new incentives and abilities to harm entities that AT&T perceives as competitive threats, and will exacerbate the anticompetitive behavior in which AT&T has already engaged. Netflix urges the Commission to reject the merger as currently proposed,” said Netflix counsel Markham Erickson in the letter.

    “If approved by the Commission, this merger would result in a combined entity with increased incentive and ability to harm online video distributors (“OVDs”) and other edge-based Internet content that Applicants view as a threat to their broadband and video programming businesses. Comcast’s withdrawal of its merger application means that, if approved, AT&T would become the nation’s largest multichannel video programming distributor (“MVPD”). After AT&T’s projected broadband investments, it could become the largest ISP as well. These two dynamics create a powerful incentive for AT&T to protect its investment in DIRECTV’s bundled programming by using its ability to harm OVDs to prevent or delay cord-cutting and cord-shaving.”

    Netflix argues that AT&T has already shows what this looks like.

    “AT&T already has a demonstrated ability to harm OVDs by leveraging its control over interconnection to degrade its own customers’ access to Netflix’s service. AT&T also has shown an interest in using data caps and usage-based pricing methods, which it can apply discriminatorily to advantage its own services. If AT&T is able to slow the development of the
    OVD industry, either by foreclosing access to broadband customers or imposing discriminatory data caps, AT&T would be able to preserve its market advantage by slowing or even reversing the shift toward competitive online video offering and away from bundled video/broadband offerings.”

    So, Netflix isn’t a fan of the merger in its current form – but what would make it happy?

    According to Ars Technica, “Netflix described the conditions it wants imposed upon the merger in a submission last September. In addition to a permanent net neutrality commitment, Netflix asked the FCC to prevent a combined AT&T/DirecTV from charging interconnection fees to Netflix and other content providers. Moreover, ‘the combined entity should be prohibited from excepting its own affiliated services from any data cap applicable to any of its services (whether fixed or mobile), Netflix wrote.”

    The FCC just got done killing Comcast’s proposed Time Warner Cable takeover. Netflix and other streaming services like it played a big part in why the FCC hated that deal.

    “Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services,” said FCC chairman Tom Wheeler of the Comcast/TWC merger.

    AT&T and DirecTV agreed to a $48.5 billion deal last May.

  • Comcast’s Final Tally on Failed Time Warner Cable Deal: $336 Million

    Comcast spent $336 million to not acquire Time Warner Cable.

    In the company’s Q1 earnings report, it reported $99 in “transaction” costs. If you add that to all the other transaction costs Comcast reported in 2014 it looks something like this:

    “The costs are mainly for legal fees and outside consulting firms—everything from Human Resources and IT consulting to banks and management consulting services,” Comcast VP of Government Communications Sena Fitzmaurice told Ars Technica. “Communications and lobbying fees would be included—however, what is included has to be direct and incremental—so only those fees that are directly and incrementally associated with the deal.”

    The deal, which was first announced in February of 2014, officially died on April 24, 2015. Comcast announced it had abandoned its efforts to acquire Time Warner Cable, following reports that said the Department of Justice and Federal Communications Commission were both gearing up to recommend against the deal.

    If the merger had been approved, the Comcast-TWC behemoth would’ve controlled 57% of the US broadband market and 30% of the cable market.

    Just as he said in the announcement of the deal’s failure, Comcast CEO Brian Roberts said that they’re “moving on” in the earnings call.

    So, how much money is $336 million? A lot. How much is it to Comcast? Well, here’s a little perspective:

    Image via Steven Depolo, Flickr Creative Commons

  • Time Warner Cable Already Has Another Suitor

    The dead Comcast/Time Warner Cable deal is still warm, but Time Warner Cable already has a potential buyer who isn’t wasting any time in going after the major telecommunications player.

    And it’s a familiar face.

    According to the Wall Street Journal, Charter Communications is ready to move on TWC. From the WSJ, quoting sources:

    Charter, which is backed by John Malone’s Liberty Broadband, could approach Time Warner Cable with a proposal soon, the people said. People close to Charter acknowledged that they will have to come up with a better offer than what they presented to Time Warner Cable more than a year ago, given that Time Warner Cable’s operations have improved and both companies’ stock prices have climbed. Charter is unlikely to make a hostile bid, one of the people said.

    Before the Comcast deal materialized, Charter made multiple attempts to buy Time Warner, offering the company $37.4 billion in January of 2014. Comcast, of course, won the bidding war with a larger bid ($45 million). Charter fought it for a while, but eventually dropped its pursuit in April. Comcast and Charter made a subsequent subscriber deal.

    On Friday, Comcast abandoned its push to acquire Time Warner Cable, due to looming concerns that both the Department of Justice’s antitrust division and the Federal Communications Commission were poised to recommend it blocked.

    “We have always believed that Time Warner Cable is a one-of-a-kind asset. We are strong and getting stronger. Throughout this process, we’ve been laser focused on executing our operating plan and investing in our plant, products and people to deliver great experiences to our customers. Through our strong operational execution and smart capital allocation, we are confident we will continue to create significant value for shareholders. I’m extremely proud of the professionalism, dedication and resiliency our 55,000 employees have shown over the past year and thank them for their continued commitment to Time Warner Cable,” said Time Warner Cable CEO Robert Marcus.

    Both the Department of Justice and the FCC made statements following Comcast’s decision that cited streaming services and online media as big reasons for their opposition.

    Last month Charter agreed to buy Bright House Networks for $10.4 billion – but that deal was contingent upon the success of the Comcast / Time Warner Cable deal.

    Image via Jonathunder, Wikimedia Commons

  • Netflix Was a Big Part of Why Regulators Hated Comcast/TWC Merger

    Netflix Was a Big Part of Why Regulators Hated Comcast/TWC Merger

    By now you’ve probably heard that Comcast has abandoned its push to acquire Time Warner Cable, due to looming concerns that both the Department of Justice’s antitrust division and the Federal Communications Commission were poised to recommend it blocked.

    “Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away,” said Comcast CEO Brian Roberts.

    Now, both the DoJ and the FCC have issued official statements on the death of the merger, and they both sign a similar tune. A main concern for both the DoJ and the FCC, apparently, was Netflix (& other streaming services, of course) and Net Neutrality.

    Take a look at FCC Chairman Tom Wheeler’s statement (bolding ours):

    Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services. I am proud of our close working relationship throughout the review process with the Antitrust Division of the Department of Justice. Our collaboration provided both agencies with a deeper understanding of the important issues of innovation and competition that the proposed transaction raised.

    And here’s what Attorney General Eric Holder had to say:

    The companies’ decision to abandon this deal is the best outcome for American consumers. The Antitrust Division of the United States Department of Justice has demonstrated, time and again, that it can and will defend the interests of the American consumer no matter the complexity of the issue or the size of the opponent. This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world. I commend the Antitrust attorneys and investigators whose outstanding work led to this outcome, and I know that the Department of Justice will continue to fight for fair access and free competition in every industry and every market.

    According to the Wall Street Journal, Holder had already authorized the DoJ antitrust officials to file a lawsuit against the deal.

    Netflix was vehemently against the merger from the beginning, as the streaming company was forced to pay Comcast a fee for access.

    Netflix said that the merger would’ve “set up and ecosystem that calls into questions what we to date have taken for granted: that a consumer who pays for connectivity to the internet will be able to get the content she requests.”

    It appears the feds agreed.

  • Comcast / Time Warner Cable Merger Is Dead, Officially

    Comcast / Time Warner Cable Merger Is Dead, Officially

    It’s official. Comcast has announced it has abandoned its efforts to acquire Time Warner Cable, in a deal that would’ve been valued at around $45 billion. This follows reports on Thursday that said the Department of Justice and Federal Communications Commission were both gearing up to recommend against the deal.

    If the merger had been approved, the Comcast-TWC behemoth would’ve controlled 57% of the US broadband market and 30% of the cable market.

    “Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away. Comcast NBCUniversal is a unique company with strong momentum. Throughout this entire process, our employees have kept their eye on the ball and we have had fantastic operating results. I want to thank them and the employees of Time Warner Cable for their tireless efforts. I couldn’t be more proud of this company and I am truly excited for what’s next,” said Comcast CEO Brian Roberts in a statement.

    Time Warner Cable CEO Robert Marcus also weighed in on the decision, saying,

    “We have always believed that Time Warner Cable is a one-of-a-kind asset. We are strong and getting stronger. Throughout this process, we’ve been laser focused on executing our operating plan and investing in our plant, products and people to deliver great experiences to our customers. Through our strong operational execution and smart capital allocation, we are confident we will continue to create significant value for shareholders. I’m extremely proud of the professionalism, dedication and resiliency our 55,000 employees have shown over the past year and thank them for their continued commitment to Time Warner Cable.”

    Comcast’s line for over a year had been that the acquisition is “pro-consumer, pro-competitive, strongly in the public interest, and approvable” – but in the end the regulatory bodies in charge of reviewing the merger did not agree.

    The deal was unpopular from the start, as consumer advocates argued that the company would be anti-competitive and bad for customers.

    “Should the transaction survive the FCC’s and DOJ’s reviews, we believe that Comcast-TWC’s unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services for Americans – inhibiting US consumers’ ability to fully benefit from modern technologies and American businesses’ capacity to innovate and compete on a global scale,” wrote Senators Al Franken, Bernie Sanders, Edward Markey, Ron Wyden, Elizabeth Warren, and Richard Blumenthal in a recent letter to the DoJ and FCC.

    This final decision comes on the heels of reports that the FCC had proposed a “hearing designation order” for the merger review – a move that signaled the deal was fast approaching dead.

    “In effect, that would put the $45.2 billion merger in the hands of an administrative law judge, and would be seen as a strong sign the FCC doesn’t believe the deal is in the public interest,” wrote the Wall Street Journal.

    The FCC wasn’t the only regulatory agency with doubts about the merger. Antitrust officials at the Department of Justice were reportedly ready to recommend killing the merger, citing concerns that the two companies would create an entity that would ultimately be too large and harm consumers.

    Here’s a final way to look at it – with this, the two most-hated companies in America will not be joining forces.

    So, who’s going to try to buy Time Warner Cable now?

    Image via Steven Depolo, Flickr Creative Commons

  • Comcast Is Giving Up on Its TWC Deal: Report

    Comcast Is Giving Up on Its TWC Deal: Report

    Comcast is planning to kill its proposed acquisition of Time Warner Cable before the feds can kill it first.

    Bloomberg is quoting sources who say that Comcast is ready to back away from the merger, which would be valued at around $45 billion.

    This comes on the heels of reports that the FCC had proposed a “hearing designation order” for the merger review – a move that signaled the deal was fast approaching dead.

    “In effect, that would put the $45.2 billion merger in the hands of an administrative law judge, and would be seen as a strong sign the FCC doesn’t believe the deal is in the public interest,” wrote the Wall Street Journal.

    The FCC isn’t the only regulatory agency with doubts about the merger. Antitrust officials at the Department of Justice were reportedly ready to recommend killing the merger, citing concerns that the two companies would create an entity that would ultimately be too large and harm consumers.

    Comcast met with reps from both the DoJ and the FCC to try to iron out a deal – compromises to make the merger happen – but it appears those talks went nowhere.

    But as Bloomberg points out, the FCC pill was much tougher to swallow than the one from the Justice Department, however bitter it may have been:

    While the DOJ has to present a case in court to block the deal, an FCC hearing referral could prove to be the bigger obstacle to Comcast’s bid to expand its cable and Internet footprint. The last time the FCC staff proposed sending a merger to a hearing was over AT&T Inc.’s bid to buy T-Mobile USA Inc. in 2011, prompting the companies to drop the deal. The Justice Department had already brought a lawsuit seeking to block the merger.

    Comcast’s line for over a year has been that the acquisition is “pro-consumer, pro-competitive, strongly in the public interest, and approvable.” We’ll see if Comcast is soon signing a different tune. A final decision on whether to abandon the deal could come as early as Friday.

    Image via Steven Depolo, Flickr Creative Commons

  • Elizabeth Warren, Al Franken Among Six Senators Urging a Swift Death for the Comcast/Time Warner Merger

    Elizabeth Warren, Al Franken Among Six Senators Urging a Swift Death for the Comcast/Time Warner Merger

    In a letter addressed to Federal Communications Commission Chairman Tom Wheeler and Attorney General Eric Holder, six Senators are urging the blockage of Comcast’s proposed merger with Time Warner Cable. The letter comes just one day before representatives from Comcast and Time Warner Cable are set to meet with DoJ antitrust officials in the hopes of saving a deal that appears to be on shaky ground.

    “Should the transaction survive the FCC’s and DOJ’s reviews, we believe that Comcast-TWC’s unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services for Americans – inhibiting US consumers’ ability to fully benefit from modern technologies and American businesses’ capacity to innovate and compete on a global scale,” write Senators Al Franken, Bernie Sanders, Edward Markey, Ron Wyden, Elizabeth Warren, and Richard Blumenthal.

    “Since the proposal was announced last year, we have heard from consumers across the nation, as well as from advocacy groups, trade associations, and companies of all sizes, all of whom fear that the deal would harm competition across several different markets and would not serve the public interest,” says the letter.

    “We’ve also heard from constituents in our home states who are rightfully frustrated about their increasingly high cable and Internet bills and are concerned that the proposed acquisition will only drive those prices higher. Unfortunately, with only a handful of cable and Internet providers dominating the market, consumers are often left with little choice but to pay the price a given provider demands and have little say over what content is made available to them.”

    If the merger were to go through, the Comcast-TWC behemoth would control 57% of the US broadband market and 30% of the cable market.

    But it’s far from a sure thing. In fact, recent reports have indicated that the Department of Justice is poised to recommend blocking the deal. Upon hearing that news, Comcast and Time Warner Cable rushed into action and are set to meet face-to-face with regulators for the first time since they proposed the deal. It is expected that Comcast will attempt to make concessions to satisfy regulators, some of whom are as wary as the Senators.

    Comcast’s official line has always been that the deal is not anti-competitive.

    “Comcast’s merger with Time Warner Cable will ensure that a responsible and committed steward delivers advanced video and high-speed data services and innovation to these customers. The proposed transaction is pro-consumer, pro-competitive, strongly in the public interest, and approvable,” says the company.

    “We urge you to defend American competition and innovation and ensure the Americans have affordable access to high-quality telecommunications services. We hope you’ll take a stand for US consumers and businesses and reject Comcast’s proposed acquisition of TWC,” say the Senators.

    Image via Wikimedia Commons, h/t Ars Technica

  • Comcast, TWC Will Meet with Regulators to Try to Save Deal

    Comcast, TWC Will Meet with Regulators to Try to Save Deal

    With their proposed merger on shaky ground, representatives from Comcast and Time Warner Cable are planning to meet with Justice Department officials in the hopes of negotiating a pathway for the deal to proceed.

    This will be the first such meeting between the cable companies and regulators since the merger was announced.

    The Wall Street Journal Reports that Comcast will likely offer concessions to assuage wary antitrust officials at the DoJ. From the WSJ:

    The Wednesday meeting with antitrust officials could be the first of many, but it isn’t clear whether the companies can offer concessions that will satisfy regulators.

    Looming over any discussion about merger remedies will be the concessions Comcast made in 2011 to win approval to acquire control of NBCUniversal. People familiar with the current review process say the Justice Department and the FCC have been examining whether Comcast has fully complied with those earlier commitments.

    Last week, Bloomberg reported that antitrust officials at the Department of Justice were ready to recommend killing the merger, citing concerns that the two companies would create an entity that would ultimately be too large and harm consumers. The Federal Communications Commission is also looking into the merger, and has plenty of concerns of its own, according to reports.

    Comcast’s official line is that the deal is not anti-competitive.

    “Comcast’s merger with Time Warner Cable will ensure that a responsible and committed steward delivers advanced video and high-speed data services and innovation to these customers. The proposed transaction is pro-consumer, pro-competitive, strongly in the public interest, and approvable,” says the company.

    Image via Steven Depolo, Flickr Creative Commons

  • Regulators Ready to Kill Comcast / TWC Merger: Report

    Regulators Ready to Kill Comcast / TWC Merger: Report

    One of the regulatory agencies looking over the proposed Comcast / Time Warner Cable merger may be about to give it the thumbs down, citing concerns over potential harm to customers.

    Bloomberg cites the ubiquitous “people familiar with the matter” in saying that antitrust lawyers at the Department of Justice are poised to recommend against the merger.

    From Bloomberg:

    Attorneys who are investigating Comcast’s $45.2 billion proposal to create a nationwide cable giant are leaning against the merger out of concerns that consumers would be harmed and could submit their review as soon as next week, said the people.

    The antitrust lawyers will present their findings to Renata Hesse, a deputy assistant attorney general for antitrust, who will decide, along with the division’s top officials, whether to file a federal lawsuit to block the deal, they said.

    The Justice Department lawyers have been contacting outside parties in the last few weeks to shore up evidence to support a potential case against the merger, one of the people said.

    The other agency reviewing the deal, the Federal Communications Commission, is not sold either, according to reports. The deal, which looked like a sure thing a year ago, is in serious danger of falling apart. Some have already proclaimed it dead.

    Bloomberg has news on that front, too, saying “officials at the antitrust division and the Federal Communications Commission, which is also reviewing the deal, aren’t negotiating with Comcast about conditions to the merger that would resolve concerns.”

    Comcast’s official line on the merger is that it is pro-consumer and pro-competition.

    Comcast’s merger with Time Warner Cable will ensure that a responsible and committed steward delivers advanced video and high-speed data services and innovation to these customers. The proposed transaction is pro-consumer, pro-competitive, strongly in the public interest, and approvable. It will deliver better services and technology to Time Warner Cable’s subscribers and result in no reduction of choice for consumers. Following the acquisition and possible divestiture of some subscribers, Comcast subscribers will represent essentially the same share of nationwide MVPD subscribers as Comcast’s shares following the Adelphia and AT&T Broadband transactions in a much more competitive and dynamic marketplace. This transaction will create a world-class technology and media company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale.

    Last month, the fourth-largest cable provider agreed to acquire the sixth-largest as Charter Commutations offered $10,4 billion for Bright House Networks. If the Comcast / Time Warner Cable deal were to go through, the #1 and #2 providers in the US would combine to form a behemoth. The two remain the most despised companies in America.

    Image via Steven Depolo, Flickr Creative Commons

  • Staples Buys Office Depot for $6.3 Billion

    Staples Buys Office Depot for $6.3 Billion

    Two office supply giants are becoming one, as Staples has just announced its acquisition of Office Depot. The deal is worth $6.3 billion.

    “This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment,” said Ron Sargent, Staples’ chairman and chief executive officer. “We expect to recognize at least $1 billion of synergies as we aggressively reduce global expenses and optimize our retail footprint. These savings will dramatically accelerate our strategic reinvention which is focused on driving growth in our delivery businesses and in categories beyond office supplies.”

    The $1 billion is cost reduction will come from some layoffs, as well as “efficiencies in purchasing, marketing, and supply chain, retail store network optimization, as well as sharing of best practices.”

    The two companies had been in talks since September of 2014.

    “This transaction delivers great value for our shareholders and creates a company ideally positioned to serve our customers and grow over the long term,” said Roland Smith, chairman and chief executive officer for Office Depot, Inc. “It is also an endorsement of our many accomplishments and the tremendous success we’ve had integrating Office Depot and OfficeMax over the past year. We look forward to bringing our experience and knowledge to the new organization.”

    It appears that the two realized that with a combined 4,000 stores, they would be stronger together than apart. Both companies have faced increasing competition from the likes of Amazon on the online front, as well as other big-box retailers like Wal-Mart.

    Image via Lizsummers, Wikimedia Commons

  • Comcast/Time Warner Cable Merger Gets Thumbs Up from Shareholders

    The shareholders of two of the most-hated companies in America have approved their merger.

    According to Bloomberg, “more than 99 percent of shares were voted in favor of the deal” to sell Time Warner Cable to Comcast. On Thursday Comcast’s shareholders, by the same nearly 100 percent margin, approved the deal.

    That means all that’s left in the way of the merger is regulatory approval. The deal is currently facing scrutiny from the Federal Communications Commission, as well as various state regulatory agencies.

    Though Comcast and Time Warner argue that the deal would not be anti-competitive, some high profile companies and organizations have come forward to publicly oppose the sale.

    Netflix is one, which just recently filed an official petition with the FCC.

    “The proposed merger puts at risk the end-to-end principle that has characterized the internet and been a key driver in the creation of the most important communications platform in history. Unsurprisingly, given their dominance in the cable television marketplace, the proposed merger would give Applicants the ability to turn a consumer’s internet experience into something that more closely resembles cable television. It would set up and ecosystem that calls into questions what we to date have taken for granted: that a consumer who pays for connectivity to the internet will be able to get the content she requests,” said Netflix.

    The Consumers Union is another:

    “Under this proposed deal, two huge companies would become a behemoth,” said Delara Derakhshani, policy counsel for Consumers Union. “This has the potential to be a very bad deal for consumers. This industry is notoriously unpopular with consumers due to poor customer service, not to mention ever-increasing bills, and a deal this size doesn’t exactly convince us that things will get better.”

    Comcast says that the merger will “will make life online better for more people by bringing faster Internet speeds, a more reliable and more secure network, net neutrality protection, low-cost Internet access, and programming diversity to millions of new customers across the country.”

    Comcast expects the deal to close early next year, if approved. To pass the time while the FCC deliberates, Comcast and Time Warner can keep trying to give awards to FCC executives.

    Image via Comcast

  • Netflix to FCC: Say No to Comcast / Time Warner Cable Merger

    Netflix to FCC: Say No to Comcast / Time Warner Cable Merger

    Netflix, clearly unhappy with the proposed Comcast/Time Warner Cable merger from the outset, has finally made their concerns official with a petition to the Federal Communications Commission. In a just-filed Petition to Deny, Netflix argues that the entity formed by the merger would “have the incentive and ability – through access fees charged at interconnection points and by other means – to harm internet companies.”

    “The proposed merger puts at risk the end-to-end principle that has characterized the internet and been a key driver in the creation of the most important communications platform in history. Unsurprisingly, given their dominance in the cable television marketplace, the proposed merger would give Applicants the ability to turn a consumer’s internet experience into something that more closely resembles cable television. It would set up and ecosystem that calls into questions what we to date have taken for granted: that a consumer who pays for connectivity to the internet will be able to get the content she requests,” says Netflix in the petition.

    “The transaction would give Applicant control of a dominant share of the nations’s residential high-speed broadband customers at a time when those customers increasingly engage with more content-rich applications that require high-speed broadband to work properly, such as Internet-delivered video.”

    If the Comcast/Time Warner Cable deal is approved, the resulting entity would control over 60 percent of the country’s broadband households.

    We’ve seen Netflix make the net neutrality argument against this merger before. Upon release of their last quarterly earnings report, Netflix CEO Reed Hastings said,

    “Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.”

    Now, that opposition is on governmental record.

    At the time, Comcast was quick to refute Hastings’ claims.

    “There has been no company that has had a stronger commitment to openness of the Internet than Comcast and we are the only ISP in the country that is currently legally bound by the FCC’s vacated Net Neutrality rules,” said SVP, Corporate and Digital Communications Jennifer Khoury. “In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of Net Neutrality protections to millions of additional Americans.”

    Of course, all of this is taking place months after Netflix made a deal with Comcast to ensure high-quality streaming. There is a debate on whether those sort of deals, which Netflix is afraid are only going to increase with a Comcast/TWC merger, are even about net neutrality or simply business as usual – but it’s clear that Netflix wants to frame the potential merger as a strike to net neutrality.

    Image via Netflix

  • Comcast & Time Warner Cable Pass Time Awaiting Merger Approval by Helping Give Award to FCC Commissioner

    Comcast & Time Warner Cable Pass Time Awaiting Merger Approval by Helping Give Award to FCC Commissioner

    Do you pay a lot for cable and internet? Neat, me too. Check this out.

    You’ve probably never heard of it, but The Walter Kaitz Foundation is a decades-old non-profit organization with the stated mission of promoting diversity in the cable telecommunications industry.

    Every September, the Walter Kaitz Foundation holds a dinner in New York City called the Kaitz Dinner. It’s a pretty big social event for the cable industry. Each year, the foundation honors someone as a ‘Diversity Advocate’ – “an individual outside the cable industry who has demonstrated an unwavering commitment to diversity and has fostered an inclusive environment for the cable telecommunications industry.”

    This year, that individual is Mignon L. Clyburn – daughter of US Representative Jim Clyburn and current Commissioner at the Federal Communications Commission.

    As of right now, one of the biggest topics on the docket of the commission she chairs is the proposed merger of Comcast and Time Warner Cable. You know, that deal that nobody wants. If it goes through, the Comcast-TWC megabeast that emerged would control around 30 percent of the cable TV pool and closer to 40 percent of the high-speed internet market.

    As Delara Derakhshani of Consumers Union puts it, “Under this proposed deal, two huge companies would become a behemoth…it’s hard to understand how this kind of concentrated market power is going to benefit consumers.” But that’s just one side. Feel free to debate the merger’s benefits to customers in the comments.

    Anyway, back to this dinner. Turns out, it has some interesting sponsors. And by interesting, I mean completely expected and totally unsurprising. From Politico:

    Comcast will pay $110,000 to be a top-level “presenting sponsor” at the Walter Kaitz Foundation’s annual dinner in September, at which Clyburn is receiving the “diversity advocate” award, according to a foundation spokeswoman. Time Warner Cable paid $22,000 in May to the foundation for the same event, according to a Senate lobbying disclosure filed at the end of last month.

    TL;DR – Both Comcast and Time Warner Cable are paying to sponsor an event honoring the commissioner of the federal regulatory organization tasked with approving or disapproving their desired merger.

    Both Comcast and TWC say that they’ve been supporting the Walter Kaitz Foundation for many years (which is true) and it’s ludicrous to think their contributions have anything to do with “currying favor” (which is surely…something). A Comcast rep had this to say:

    “We absolutely dispute the notion that our contributions have anything to do with currying favor with Commissioner Clyburn or any honoree. Such claims are insulting and not supported by any evidence. They are purely fiction. We have supported the organization year in and year out regardless of who the dinner honorees have been.”

    Let’s play a game where I give Comcast the benefit of the doubt. This is my first time playing this game, so I’m not really sure how to do it. But I’ll try, and having done that, I gotta say, this whole thing still looks a bit…incestuous, don’t you think? Guys? Any concern about public image?

    So, there you go. That’s what’s going on right now. It’s not particularly surprising, and that fact in and of itself is what’s truly distressing.

    Image via FCC.gov