Justice Department Worries Could Mean Big Obstacle for Charter/BHN/TWC, Analyst Says
The Justice Department "believes that bigger is badder," which could spell big regulatory hurdles for Charter Communications buying Bright House Networks and Time Warner Cable, BTIG Research analyst Richard Greenfield said Friday in a blog. Pointing to comments by Nancy…
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Rose, Antitrust Division deputy assistant attorney general for economic analysis, at a June American Bar Association event, Greenfield said it was "very difficult to see how the government can approve the creation of a company nearly the size of Comcast ... particularly as it is far from clear what concessions would alleviate the government’s underlying concerns without true competition materializing." The Justice Department apparently isn't looking at end users as it analyzes the video and broadband markets, and thus the agency rejects the idea that cable consolidation does not affect competition since cable operators are in different geographic markets with no overlapping customers, Greenfield wrote. Instead, the Justice Department seemingly sees the content distribution markets as national, and sees the growing size and scale of multichannel video programming distributors and Internet service providers creating difficulty for new broadband overbuilders to buy affordable programming, which in turn slows their buildouts, he said. Greenfield has said before that he believes the Charter/BHN/TWC deals face steep hurdles for regulatory approval (see 1506170033).