Video services

Mega Media Deals Back on the Clock

OK, let's work those metaphors: Comcast is now back on the clock and riding the fast lane toward a purchase of Time Warner Cable, which is still expected to close in early 2015 despite hitting some speed bumps this fall.

The Federal Communications Commission (FCC) has restarted the timeline on its official review of both the Comcast Corp. (Nasdaq: CMCSA, CMCSK)- Time Warner Cable Inc. (NYSE: TWC) transaction and AT&T Inc. (NYSE: T)'s parallel bid to buy DirecTV Group Inc. (NYSE: DTV). The review clock clicked back on at Day 85 for the Comcast-TWV deal and Day 70 for the AT&T-DirecTV deal.

A restart of the overview process wasn't the only good news coming out of the FCC for Comcast this week: Commissioner Ajit Pai also did the company a favor by penning an open letter to Netflix Inc. (Nasdaq: NFLX) CEO Reed Hastings, which accused the Internet streaming giant of trying to create fast lanes on the Internet for video delivery. Net neutrality has become a focal point in the Comcast-TWC merger debate. Yet while many people blame broadband service providers like Comcast for unfairly charging for content delivery, Pai shifted the blame back over to Netflix in his public address. (See Comcast's Cohen: Define Internet Fast Lanes.)

Pai argued that Netflix has rejected open caching protocols with its proprietary Open Connect content delivery network effort. Instead of abiding by open protocols, he wrote, the OTT video market leader is attempting to ensure that "Netflix's videos would run the equivalent of a 100-yard dash while its competitors' videos would have to run a marathon." (See CDNs & Net Neutrality: It's Complicated.)

Confused yet? It gets worse.

Even as the FCC started clearing the path for potential merger approval (and Commissioner Pai launched his public war of words with Netflix), a new coalition called Stop Mega Comcast sprouted up to encourage regulators to reject the Comcast takeover of TWC. Included among the group's members are the non-profit organization Public Knowledge and, even more notably, satellite TV competitor Dish Network LLC (Nasdaq: DISH).

Find out more about key developments related to broadband on Light Reading's dedicated broadband channel.

The entire drama is also set against the backdrop of President Obama calling for Title II regulation of broadband providers. ISPs vehemently oppose the idea, saying it would hinder investment and innovation, while web-based companies like Netflix are all for it, arguing that more regulation would help the net neutrality cause. (See also Obama Backs Net Neutrality, Stuns Industry.)

Unfortunately, the merger/net neutrality soap opera is only going to get worse before it gets better. With billions of dollars at stake, everyone has an incentive to push their side of the story. All the review clocks and fast lanes in the world aren't going to smooth out the trip from here until that magical time when the official regulatory decisions are handed down. Caution: bumpy ride ahead.

— Mari Silbey, special to Light Reading

DHagar 12/5/2014 | 4:21:30 PM
Re: Mega Deals Back on Clock Mari, the plot definitely thickens.

Thanks for great review.  Given the complexity of issues, what is the "criteria" and whose jurisdiction now rules in the final decision?
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