The Main Stream

May 8, 2014 12:32 PM

Comcast-Time Warner merger faces hurdles

(NBC) - They want to be the nation's largest cable-internet provider, but the deal between Comcast and Time Warner Cable companies faces hurdles.

The question is whether or not this proposed $45 billion dollar deal threatens not only consumer prices, but also competition.

On Thursday in Washington, a house subcommittee heard from witnesses who are against this merger. Some of those called to testify will be the president and CEO of the American Cable Association, which is a group of small and medium sized cable providers.

Critics feel the merger would result in a monopoly in many areas of the country. Companies like Netflix and Univision, as well as the Writers Guild of America have also voiced its opposition.

The deal would impact about 33 million subscribers.

Comcast and Charter Communications will each swap 1.6 million of its own subscribers to each other. Comcast will maintain the most important assets it is acquiring from Time Warner Cable, which is the New York and Los Angeles market, explains Rich Greenfield, BTIG.

Comcast offered to sell 1.4 million pay TV subscribers to Charter Communications for $7.3 billion as part of a transaction aimed at winning regulatory approval for its proposed $45 billion takeover of Time Warner Cable.

Comcast also said it would divest another 2.5 million subscribers into a new publicly traded company, dubbed SpinCo for now, to be one-third owned by Charter and two-thirds by Comcast shareholders.

The deal would make Charter-whose own bid for Time Warner Cable was thwarted by Comcast's higher offer-the second-biggest U.S. pay TV company with 5.7 million customers, overtaking Cox Communications.

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