A Guide To The Mechanics of the Comcast/TWC Deal. Part I: Introduction

Those unfamiliar with how the merger review process works will want to know what happens next in the Comcast purchase of Time Warner Cable (TWC). In this 4 part series, I sketch out how the application will proceed and what role Congress plays in all this. I’m going to save for another time the arguments on the merits and what the likelihood is of blocking the deal (or getting stronger conditions than Comcast/TWC have already put on the table). I intend this simply as mechanical guide so that folks playing at home can follow the action, and weigh in as they see fit.

Short version: The deal gets both an antitrust review and a separate review by the Federal Communications Commission (FCC) under the Communications Act.  These reviews, while related, actually apply very different procedures and standards of review. The clock won’t start ticking on the review cycle until Comcast and TWC send their official application to the FCC and the official notice under the Hart-Scott-Rodino Act (HSRA) to the antitrust agencies.

 

Congress doesn’t officially play a role, but it exercises oversight and serves as something of a political barometer for the deal through public hearings. Congress also serves as something of a feedback loop for the agencies. Strong Congressional opposition to the deal – especially if bipartisan – can encourage the agencies to challenge the deal. By the same token, strong Congressional support (or absence of strong opposition) can pressure the agencies to approve the deal.

 

The White House plays even less of a role. The FCC is an independent agency and the White House has no direct means of influencing the agency. Of course, White House officials can talk to the Chair, but direct public efforts by the White House to influence the FCC (either for or against the merger) would be seen as undue political influence and kick up quite a fuss.

 

Yes, everyone notes how Brian Roberts plays golf with Obama, etc. That has symbolic value, but not a practical effect. If anything, it pushes the White House to remain even more scrupulously neutral to avoid any accusation of “crony capitalism.”

 

 

When does the clock start?

 

Although the parties have announced the basics of the deal, the actual regulatory clock does not begin running until the parties file their official notice with the U.S. antitrust agencies (the Department of Justice Antitrust Division (DoJ) and the Federal Trade Commission (FTC)). The FCC will start its 180-day ‘shot clock’ when Comcast and TWC file their official application to transfer TWC’s various licenses to Comcast. Comcast has said it plans to file sometime at the end of March.

 

(In the interests of brevity, I will skip why it takes so long for companies to put together their application. Suffice it to say that for a deal this time a month between the announcement of the deal to the public and the official filing of the application is not unusual.)

Up Next, How The Antitrust Review Works.

Part III: How The FCC Review Works

Part IV: Congress, the White House and the Public

Stay Tuned . . . .

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