New York Governor Andrew Cuomo and other state leaders could “tie Comcast’s acquisition of Time Warner Cable up in knots,” according to a NY Post story. Changes to state rules would put the onus on Comcast to prove that the merger is in the public interest. “This could essentially kill the deal,” according to the story.
Post-merger, Comcast would control 40% of the broadband market and around 30 million TV subscribers.
As first reported on NYPost.com, changes to state rules that would give cable regulators more power were vetted during closed-door budget on 3/18. In addition to giving New York State’s Public Service Commission (PSC) added power here, the rule change would put the onus on Comcast to prove that its mega-merger with TWC is in the public interest. The new rule is a departure from the current rule, which requires the PSC to show why any acquisition fails the public interest test.
Cuomo is discussing giving the PSC much greater oversight of the proposed cable combo, making it almost impossible to finalize, sources told the paper.
If the change is OK’d, it would be in line with similar rules gas and oil companies must follow, said a Cuomo administration official.
While the proposed new powers and rules could make state approval for the Comcast deal much harder to get, the official played down any specific intent of the move: “We’re modernizing New York’s laws to reflect the realities of New York’s marketplace.”
“However, others in Albany feel the move by Cuomo is aimed squarely at the deal. The Cuomo proposal would add more provisions and expand the number of necessary steps to approval,” one person told The NY Post.
Legislative leaders have a little over a week to finalize the budget’s framework.
“We have seen the proposed amendments from the Governor,” a Comcast spokesman said in a statement, “and are not troubled by these amended procedures. We are confident that the pro-competitive, pro-consumer benefits like faster Internet speeds and improved video options resulting from the transaction are compelling and will result in approval from the state.”
Francisco Montero, Managing Partner, Fletcher, Heald & Hildreth, P.L.C., tells RBR-TVBR he’s thinking Comcast is right: “Despite my Brooklyn-born heritage, my feeling is that this is a tempest in a teapot, but it makes for great NY tabloid headlines. That isn’t to say that Comcast doesn’t have regulatory hurdles to overcome and that this merger will not face serious challenges from competing industries, consumer groups and others, but I think the real battlefield will be inside the Beltway and not in Albany.”
RBR-TVBR observation: The states do have a lot of power here, as they should. We just reported that Florida and other states will join DOJ in seeking to determine if Comcast’s plan to merge with Time Warner Cable is legal under U.S. antitrust law.
“We are part of a multistate group reviewing the proposed transaction along with the U.S. DOJ Antitrust Division,” the Florida attorney general’s office told Reuters. Indiana officials were also looking at the deal to determine “the potential impact in Indiana.” Pennsylvania is reviewing the case independently.