Comcast Drops Bid for Time Warner Cable (Developing)

Comcast is dropping its plan to acquire Time Warner Cable following intense scrutiny and widespread opposition to the $45.2 billion deal, Comcast confirmed in a statement today.

“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,” the statement reads.

Had the deal gone through, the combined company would have controlled 30 percent of market for pay TV and more than 50 percent of the broadband internet market.

The decision represents an abrupt about-face for Comcast, which posted an aggressive response to critics of the proposed merger earlier this week. But the deal may have already been all-but-dead on Wednesday when Federal Communications Commission staff reportedly recommended that the merger be subjected to a hearing with an administrative law judge.

Such a hearing would almost certainly have resulted in the merger being axed. AT&T backed out of plans to acquire T-Mobile in 2011 after a similar FCC recommendation.

Meetings between the two companies and the Department of Justice reportedly went poorly. And the bad news kept piling up. Six U.S. senators published an open letter opposing the deal earlier this week.

Comcast and Time Warner Cable first announced their intentions to merge in February 2014. Critics of the plan argued that the deal would concentrate too much power in Comcast’s hands. Although Comcast and Time Warner don’t compete in the same broadband markets, the merger could have affected agreements with content delivery networks, content providers such as Netflix, and television networks such as Discovery Communications, which publicly criticized the proposal.

Comcast responded by allegedly ghostwriting letters of support to the FCC on behalf of political leaders at all levels of government. But it seems the letters did little to help the company’s case.

The end of this merger opens the door for Charter Communications to resume its own talks to merge with Time Warner, a plan that was disrupted by Comcast’s own proposal. Last year the chairman of Liberty Media, Charter’s largest stakeholder, told investors that Charter would try to resume its acquisition attempt if Comcast’s bid fell through.