A possible deal between Comcast and Time Warner Cable (TWC) has received considerable buzz on Wall Street. However, a commissioner at the Federal Communications Commission (FCC) tells the Wall Street Journal that the government is currently disinclined to approve a merger that would promote major consolidation in the industry.
Ajit Pai, one of five FCC commissioners, said that a bid by Comcast to buy Time Warner Cable “would face a number of hurdles in the Obama administration.”He noted that over the past few years, the government has blocked or attempted to block a number of proposed mergers, including AT&T’s (T) failed bid to acquire T-Mobile (TMUS). Pai noted that he would not personally oppose any merger that might “serve the public interest.”
Time Warner has attracted the interest of Charter Communications (CHTR), which is controlled by John Malone’s Liberty Media (LMCA). So far, Time Warner has so far rejected offers from Charter, but the company is reportedly readying a new, higher bid.
Comcast could make a bid of its own for Time Warner, but would need clearance from both the FCC and the Department of Justice. Earlier this year, the DOJ sued to block the merger of American Airlines (AAMRQ) and U.S. Airways (LCC), though it ultimately agreed to a settlement that would allow the combination to move forward.
Shares of Comcast rose modestly in Friday morning trading, while Time Warner dipped slightly.