WASHINGTON – Staff attorneys at the Justice Department's antitrust division are nearing a recommendation to block Comcast Corp.'s bid to buy Time Warner Cable Inc., according to people familiar with the matter.
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 final decision about the deal will be made by the division's senior officials.
A rejection of the deal would be a blow to Comcast, which would gain valuable cable assets in major U.S. cities including New York and Los Angeles by acquiring Time Warner Cable. Expanding Comcast's broadband Internet and video footprint would help it better compete with satellite, Web and telecommunications competitors who have taken hundreds of thousands of TV subscribers from the Philadelphia-based company in recent years.
Renata Hesse, a deputy assistant attorney general for antitrust, will take the analysis and ultimately decide, along with the division's top officials, whether to file a federal lawsuit to block the deal, they said. Lawyers at the division have been scrutinizing whether the merged company could harm competition from video streaming services, such as Netflix and Dish Network's Sling TV, sources 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, the sources said.
Furthermore, 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, such as selling parts of its business or changing practices, said two people familiar with the situation.
Comcast has been seeking approval for the merger from the Justice Department and the FCC since it was announced last year. Comcast could still fight any lawsuit in court or attempt to reach a settlement that would let the deal go ahead. The Justice Department antitrust lawyers recommendation isn't yet complete and company officials remain confident.
"There is no basis for a lawsuit to block the transaction," said Sena Fitzmaurice, a Comcast spokeswoman. The merger "will result in significant consumer benefits — faster broadband speeds, access to a superior video experience, and more competition in business services resulting in billions of dollars of cost savings."
Time Warner Cable spokesman Bobby Amirshahi said "we have been working productively with both DOJ and FCC and believe that there is no basis for DOJ to block the deal."