Time Warner Cable (TWC) shareholders have approved the company’s takeover by Comcast, with more than 99 percent of votes cast in favor of the deal, a day after Comcast shareholders approved the deal with a similar level of buy-in.
At the same time the FCC suggested a compromise with the companies that would encourage them to hand over documents the Commission wants for its review of the acquisition, but the companies have thus far refused to provide.
The FCC has received complaints from smaller cable companies and from the general public that Comcast is already too big, and that its consumption of TWC would increase its already excessive market power, including when it comes to programming costs.
To that end, the FCC has requested to see the contracts that various programmers have with Comcast and Time Warner Cable. The two MSOs have been fighting the request, claiming the information is competitive, and they don’t want to even risk having the information become public.
Today the FCC’s Media Bureau (the unit of the agency overseeing the merger) promised to offer to keep the Comcast and TWC documents secret, assenting to such demands for the first time ever, according to the Commission. In a blog post today, the Media Bureau said it “issued an Order establishing unique protections for the Merger Applicants’ programming contracts, retransmission agreements, and other related materials.”
The blog was signed by Bill Lake, chief, Media Bureau, Jon Sallet, general counsel, and Julie Veach, chief, Wireline Competition Bureau. Much of the lengthy post goes on to establish the FCC’s authority to ask for such information in the first place.
There is also a separate hitch to the progress of the FCC’s review, with the result that the regulatory review process is officially suspeended. The FCC is bound to conduct its review in 180 days, but the Commission stopped the clock when Comcast recently filed a large volume of additional documents concerning the merger that the FCC wants adequate time to review.
Comcast and TWC still say they expect to close the deal early next year.
Last February, TWC agreed to merge with and into a 100 percent owned subsidiary of Comcast. Upon completion of the Comcast merger, all of the outstanding Time Warner Cable shares automatically will be cancelled and will be converted into the right to receive 2.875 shares of Class A common stock of Comcast.
The takeover of TWC will be executed with a combination of related maneuvers, including a swap of some systems with Charter Communications that will see Charter take on an additional 3 million former Comcast and Time Warner subscribers. Comcast will end up with a greater concentration of subscribers on near the east and west coasts, while Charter will consolidate its presence in markets in the middle of the country.
The two companies will also spin out a separate operation, to be called Greatland Connections, that will also have about 2.5 million subscribers. Charter will have significant control of Greatland through stock holdings.
