The ABCs Of Aereo: What Is Aereo And Why Are Broadcasters Taking It To The Supreme Court?

By and | Wednesday April 16, 2014 @ 1:01pm EDT

Editors Note: The first of three Deadline posts that lay out the issues in the Aereo case, which Deadline Legal Editor Dominic Patten will cover from the Supreme Court next week. Today: A primer about Aereo and what’s at stake in the dispute with broadcasters.

U.S. Supreme Court justices are so mistrustful of technology that they bar TV cameras from their proceedings and require visitors to check their smartphones at the door.What Is Aereo But on April 22 they will take an hour to hear arguments in a case that could re-shape television and the Internet. All of the major broadcast companies are challenging the legality of an upstart streaming service: Aereo, a company backed by IAC chief Barry Diller that began to sign up subscribers in New York City in February 2012. The issues both sides will raise are complicated. But the controversy boils down to an important question: What rights do broadcasters and citizens have to content on the publicly owned airwaves?

Related: It’s On! – Supreme Court Agrees To Hear Aereo Case

Q: How does Aereo work?
A: Subscribers in the cities Aereo serves pay a minimum of $8 a month. That gives them exclusive access to one of its thousands of dime-sized antennas that pick up free, local, over-the-air broadcasts. The company then streams the live programming in the same local market to subscribers’ Web-connected TVs, computers, or mobile devices.

Aereo info graphic

Q: Does it just stream live TV?
A: Aereo also offers a remote storage DVR. Just like with a home DVR, each customer can choose programs to record, and then watch later with the same fast-forward and rewind capabilities. The difference is that the digital files are kept on Aereo’s servers, not on a hard drive in the home. Those who pay $8 per month get 20 hours of DVR storage each month and access to one antenna, while those paying $12 get 60 hours and access to two antennas.

Aereo mapQ: Where can people subscribe?
A: Aereo began in New York, and now also is available in Boston, Atlanta, Detroit, Cincinnati, Baltimore, Dallas, Austin, Houston, Miami, and San Antonio. It plans to launch in cities including Washington, DC, Philadelphia, Pittsburgh, Cleveland, Chicago, Indianapolis, Minneapolis, and Kansas City.

Q: Why does that bother broadcasters?
A: Aereo doesn’t pay local TV stations when it streams their programming. Broadcasters say that infringes on their copyrights. Read More »

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Deadline Big Media 80 – Comcast Goes To Congress Podcast

By and | Friday April 11, 2014 @ 8:22pm EDT

Deadline Big Media ep 80In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom untangle the latest twists in the giant Comcast-Time Warner Cable merger proposal, as a Senate committee grills Comcast’s “Jedi Master” of a chief lobbyist and Charter prepares a challenge at the TWC annual meeting. The Davids also talk about the very different tone of two just-signed retransmission deals, at least compared to last year’s Time Warner Cable-CBS brawl; how IMAX reduced its stake in China while increasing its influence; and this week’s National Association of Broadcasters conference, where FCC Chairman Tom Wheeler urged broadcasters to think like “tech disruptors” and NAB chief Gordon Smith called for a federal plan for broadcasting.

Deadline Big Media podcast 80 (.MP3 version)
Deadline Big Media podcast 80 (.M4A version)

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Comcast’s Brian Roberts Made $31.4M In 2013, +7.7%

By | Friday April 11, 2014 @ 5:39pm EDT

The company that owns the largest collection of cable systems plus NBCUniversal has about 3.6 times the market value of CBS — yet CEO Brian Roberts made less than half of what CBS paid Les Moonves in 2013?Brian Roberts No need to shed any tears: After all, Roberts’ family controls Comcast, and it gave him his best pay day in years for a period when the stock value appreciated 39.1%. COMCASTThe package consists of $2.8M salary, $5.3M stock awards, $5.3M option awards, $9.2M in non-equity incentives, $5.1M change in pension value and $3.7M in other compensation. NBCU chief Steve Burke came close to his boss with an 18.1% raise that brought him to $31.1M. Roberts’ take includes $192,177 for personal use of the company jet; Burke’s aircraft use came to $390,994. The board says that Roberts “continued to demonstrate strong leadership” and adds that Burke “successfully managed NBCUniversal.” In a letter to shareholders Roberts talks up Comcast’s planned $45.2B acquisition of Time Warner Cable noting that “once again” he has called on his government affairs consigliere David Cohen “to help guide us through the government approval process so we can achieve a timely close.” The EVP, who is becoming a celeb in his own right from his appearances to defend the controversial deal, made $14M last year, down 12.1%. Comcast will hold its annual meeting on … Read More »

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Zero-Point-Zero: Baseball’s Worst Team Gets TV’s Worst Rating — Again

By | Wednesday April 9, 2014 @ 3:56pm PDT

Major League Baseball‘s 2014 season isn’t even 10 games old, which means every team is still in contention. Even the Houston Astros, whose fans have suffered with the league’s worst record each of the past three years. The team is mired in last place again — natch — but even more disheartening is Astrosthe 0.0 Nielsen rating it posted for Monday’s game. That’s right, a Blutarsky: zero-point-zero. One could safely assume this is a new low for the Astros, except that it isn’t. The team also scored a 0.0 back in September. But that was as it was circling the drain of another tragic season and nearly a quarter of the city’s TV audience was watching the Houston Texans play the defending Super Bowl champion Baltimore Ravens. There was no such competition Monday night as the Astros were being routed by the Angels. Yes, a Nielsen rating can be deceiving. The channel airing the game, CSN Houston, only reaches about 1 in 11 Houston-area TV households; no satellite carrier or U-verse. But really, if the hometown team pulls a double donut in its seventh game of a fresh season, it doesn’t bode well for when the Astros are eliminated from the playoffs by midsummer or so.

Related:
TWC Sued For Passing Lakers-Dodgers Costs On To Customers

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UPDATE: Senate Committee Expresses Skepticsm Over Comcast-Time Warner Cable Merger

Comcast-Time-Warner-Cable-logos__140213130107-150x150__140213191744UPDATED: The Senate Judiciary Committee hearing into Comcast’s $45.2B acquisition of Time Warner Cable wrapped after three hours today. And Comcast EVP David Cohen upheld his reputation as a lobbying Jedi Master, although critics of the deal scored by pointing out how it could lead to higher prices and problems for independent programmers. Senate Judiciary Cmte Holds Hearing On Comcast-Time Warner Cable MergerCohen started off strong in his opening statement: He cast his company as the embodiment of the American Dream — and announced that it has more than 1M WiFi hot spots with plans to boost their transmission speeds. “This is the 13th time we’ve increased Internet speeds in 12 years,” he says. Public Knowledge’s Gene Kimmelman — a former Justice Department antitrust lawyer — hit back. He charged that it would be “anathema to Comcast” if programmers want to offer content directly to consumers via the Internet for a low cost. The cable giant is committed to “charging top dollar” and, as owner of NBCUniversal, would be like an octopus with tentacles “each capable of squeezing innovation.”

In regard to pricing, Cohen said, in response to a question from committee Chairman Patrick Leahy (D-Vt.), that “there is nothing in this transaction that will make anyone’s bills go up….Consumers today are in the driver’s seat.” He added later that programming costs have appreciated 98% over the last decade. Later he told Sen. Al Franken (D-Minn.) — who wanted to know whether shareholders would demand higher prices — us-senate-logo_20110526180215that “we have made it a point of significant discussion about our need to continue to invest to compete better with national and global competitors.” Kimmelman responded that Comcast is in the driver’s seat in the highly concentrated video and broadband markets. “The squeeze will come from Comcast,” he says. “It’s logical. They want to save money….and it could lead to significant price increases for others.”

Franken had Cohen against the ropes in a discussion about Comcast’s efforts to push customers to buy multiple or upgraded products. “When you train [sales]people to upsell, you’re not training them to sell the stand-alone product.” Cohen said that “we are allowed to train people to upsell,” but sales reps also “have to be aware of the stand-alone product” and provide it on request. Read More »

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Charter And Others Prepare To Challenge Time Warner Cable At Its Annual Meeting

It’s not WrestleMania, but Time Warner Cable shareholders can expect more excitement than usual at their annual meeting this year: time-warner-cable-logoThe company’s preliminary proxy, out this morning, includes proposals from Charter Communications and other investors  that could create problems for TWC management as it tries to sell the No. 2 cable giant to No. 1 Comcast.

Charter — which was the runner up in the bidding contest, but hasn’t given up — wants to change the by-laws to fix the size of the TWC board at 13 instead of allowing directors to change it when they want. Charter plans to propose its own TWC board slate, and no doubt wants to ensure that directors don’t boost the size of the body to dilute the impact if the challengers win. TWC naturally urges shareholders to reject Charter’s candidates, and the proposal. “Recruiting qualified candidates is a challenging and time-consuming process, and the Board of Directors believes that it is in the best interests of the Company’s stockholders for the Board to retain the flexibility to either increase its size if a highly-qualified candidate becomes available or to decrease its size if a director declines to seek reelection or for other reasons,” the company says.

Charter also wants TWC investors to support a change in the by-laws to repeal any changes made without shareholder support after July 26, 2012. Here, too, TWC’s board urges a “no” vote saying that the resolution “represents no … Read More »

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Hearst Television Stations Blacked Out On Dish Network In Latest Retrans Tiff

By | Tuesday April 8, 2014 @ 9:23pm PDT

DishNetwork__130702025735-200x151__130918204554__130927000627More than two dozen network-affiliated Hearst Television stations went dark on the satcaster tonight after the sides hit a wall in their retransmission talks. Dish Network‘s carriage deal with Hearst TV expired March 1, but the parties had extended the deadline to tonight at 7 PM Pacific. The blackout affects more than two dozen Hearst stations including ABC affil WCVB in Hearst TelevisionBoston, the nation’s No. 7 TV market, and outlets in top 25 markets Sacramento, Pittsburgh and Tampa, FL. It comes the same day that the Weather Channel and satellite giant DirecTV settled their carriage dispute and seven months after Time Warner Cable and CBS settled their bitter retrans fight.

Related: FCC Chairman Eyes Limits On Local TV Alliances For Retrans Deals

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Comcast Sets Stage For Testy Senate Hearing, Telling FCC That Time Warner Cable Acquisition Serves Public

By | Tuesday April 8, 2014 @ 11:09am EDT

Comcast Time Warner Cable logos

UPDATE, 10:06 AM: Comcast EVP David Cohen just fleshed out in a press call some of his company’s arguments for the Time Warner Cable deal. To those who say the combined company would be too big he says that “in this particular case we think big is good” — it would be better able to offer new and improved services. And if Comcast is wrong “it doesn’t make any difference really because, as a customer, you’ll have the exact number of choices as you had before the transaction.” The only change: With Comcast instead of TWC as a broadband or video provider consumers’ “choice will be better.” He adds that Comcast is focused “like a laser” on improving the customer experience. (Sound familiar?)

PREVIOUS, 8:09 AM: This is the kind of thing you’d expect the cable giant to assert in a regulatory filing — and that will be roundly contested, including tomorrow at a Senate Judiciary Committee hearing on the $45.2B deal. Content companies that might oppose the deal “have strong relationships” with the committee, which oversees copyright matters, Guggenheim Securities’ Paul Gallant says. What’s more, the committee includes two strong critics of media consolidation: Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.).

SenateJudiciaryCommitteeComcast detailed its public interest arguments in a 175-page document delivered to the FCC this morning. It “lays out in considerable detail how Comcast and TWC are better together for millions of customers and businesses, describing the exciting enhanced services and other concrete consumer benefits that will be available because of the transaction,” Comcast EVP David Cohen says in a blog post. In addition to cable and Internet services, Comcast owns NBCUniversal.

The company indirectly takes issue with Netflix CEO Reed Hastings’ claim that Comcast imposed an “indirect tax” on the streaming video company in a recent deal: Netflix agreed to pay Comcast directly to access its broadband lines in a way that will deliver the best possible transmissions to its customers. Comcast says it has “no economic incentive” to hit up so-called edge providers because its customers “place a high premium on being able to access any Internet content they want.” Comcast would have about 30M broadband customers after acquiring TWC. Read More »

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Time Warner Cable, DirecTV In Stalemate Over Dodgers Channel

By | Friday April 4, 2014 @ 12:29pm PDT

SportsNet LA logoDirecTV subscribers apparently will not be watching any Dodgers games in the near future. Talks have broken down with the satellite TV provider and Time Warner Cable, which handles distribution of the MLB team’s new SportsNet LA channel, according to TWC.

Maureen Huff, Time Warner Cable vice president of public relations, told Deadline, “We can confirm that DirecTV has left the negotiating table. We were advised by their negotiating team that they would not counter our last proposal and that conversations were at an end. We are eager for all consumers in the Dodgers footprint to have access to SNLA and we hope that other providers will come on board quickly so that the frustrated DirecTV consumers have alternative options throughout the region.  We will continue to work tirelessly to make that happen. And, in the event that DirecTV would like to re-engage discussions, we stand at the ready to do so 24×7″. Read More »

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Comcast Says It May Give $2.5B To Shareholders If They Approve Time Warner Cable Deal: Report

By | Monday March 31, 2014 @ 3:22pm EDT

Comcast-Time-Warner-Cable-logos__140213130107-150x150__140213191744This is sure to hurt Charter Communications’ already long-shot effort to persuade Time Warner Cable shareholders to reject the $45B sale to Comcast. The cable giant plans to add $2.5B in share repurchases to the current plan to buy back $3B in 2014, Comcast CFO Michael Angelakis told Bloomberg. He noted that when the deal with TWC was announced, the No. 2 cable company cancelled its own planned $2.5B stock repurchase. “We’d evaluate whether we’d want to accelerate [Comcast's] plan and increase it above $3 billion, based on the fact that Time Warner Cable had terminated their buyback plan,” he told the news service. His company could finance the stock repurchase from the cash it expects to collect after a merger when it sells systems with at least 3M subscribers, bringing its total to about 30M. Comcast and TWC’s stock prices each declined more than 5% over the last few weeks, but rebounded today. TWC’s +1.4% in afternoon trading and Comcast is +1.3%.

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Machinima Names Former Ovation TV Exec Chad Gutstein New CEO

By | Monday March 31, 2014 @ 10:35am PDT

machinimaChad Gutstein, formerly COO at the Ovation television network, has been tapped as CEO at Machinima, the latest move as the online video service revamps itself as a player in original content. Gutstein will spearhead Machinima’s network and brand strategy and oversee programming, sales, marketing, strategic partnerships, product development, and diversification of distribution and revenue. At Ovation, Gutstein grew the arts network’s reach to nearly 55 million households from 5M, booting its original programming plans significantly last fall after Ovation was dropped by Time Warner Cable at the end of 2012 in an effort to control costs. “Machinima is ready for the next level, and Chad has all of the unique qualities we were seeking in a new CEO to bring us there,” said Machinima co-founder and chairman Allen DeBevoise in a release today announcing the hire. “His fresh and respected outlook, deep knowledge of the TV and digital business, and proven track record will all benefit Machinima as we enter our next phase of growth. Chad’s most recent experience building Ovation’s brand and audience, and translating the value of its audience and programming to TV distributors and tier one advertisers, will help Machinima exponentially accelerate its mission.”

Machinima axed 30% of its work force earlier this month and soon after named ex-Fox Networks boss Tony Vinciquerra to its Board of Directors, the body to which Gutstein will report. Machinima also recently raised $67M in financing from the likes of Warner Bros (which led funding with $18M), Google Capital and Redpoint Ventures as the service looks to find ways to make money outside of its partnership with YouTube, which takes about 45% of the ad revenue it sells. Read More »

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Charter Asks Time Warner Cable Investors To Reject Comcast Acquisition

Charter logoReturned today from the CinemaCon confab, so I’m just now getting a chance to catch up with Charter Communications‘ astonishing SEC filing that urges Time Warner Cable shareholders to support its $37B Comcast-Time-Warner-Cable-logos__140213130107-150x150__140213191744cash-and-stock bid over Comcast’s $45.2B all-stock offer. I don’t know if there’s enough in the proxy to derail the Comcast-TWC deal. But it’s sure to create some turbulence — if nothing else by giving ammo to class action lawyers who want to argue that the TWC board failed to faithfully represent shareholders’ interests when it stiff-armed Charter and embraced Comcast.

Related: Fears Of Government Rejection Hung Over Comcast’s Deal Talks With Time Warner Cable: Proxy

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Don’t Bet Just Yet On A Dish Network-DirecTV Merger, Analysts Warn

By | Thursday March 27, 2014 @ 2:20pm EDT

Investors seem to be clearing their heads from the adrenaline jolt they experienced yesterday when Bloomberg reported that Dish Network chairman Charlie Ergen recently approached DirecTV CEO Michael White to discuss a potential merger — in part as a response to Comcast’s $45.2B deal to buy Time Warner Cable. Dish DirecTVShares in both satellite companies shot up on the news, but have started to settle as of midday trading today leaving Dish +5.5 over the day and a half period with DirecTV +2.6%. The big surprise in the report was that Ergen is still interested in a deal: He has been focused lately on amassing wireless spectrum to launch a broadband service, and has made skeptical comments about the prospects for traditional satellite TV. But he and White have noted that the companies could save a lot of money — if regulators would let them combine. Read More »

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Apple, Comcast In Talks For Streaming TV Deal: Report

By | Sunday March 23, 2014 @ 7:17pm PDT

apple Apple and Comcast are looking to team up on a deal for high quality streaming TV, “people familiar with the matter” tell WSJ. News of the early talks between the companies comes a month after Bloomberg reported that Apple was in negotiations with Time Warner Cable for a new Apple TV set-top box. The very next day Comcast and Time Warner announced their $45.2B merger sale. Comcast__120608213515 Apple’s potential pact with Comcast would ensure faster streaming to Apple users through the “last mile” channel of internet traffic separate from Comcast’s public web access, delivering high quality streams via Apple’s new cloud-based set-top box. Last week Netflix CEO Reed Hastings called out Comcast for the “arbitrary tax” charged to boost the quality of Netflix’s streaming transmissions via the cable provider’s network, despite Netflix’s part in what last month was announced as a “mutually beneficial interconnection agreement.”

Related: Netflix CEO Says Comcast Imposed An “Arbitrary Tax” In Deal
What A Merger Of Comcast & TWC Could Mean For Hollywood

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WGA Urges FCC to Block Comcast- Time Warner Cable Merger

By | Sunday March 23, 2014 @ 6:54am PDT

WGABy David Robb, Special To Deadline

RELATED: WGA West & WGA East Slam Merger Of Comcast And Time Warner Cable

EXCLUSIVE: The Writers Guild of America has offered a chilling picture of the future of television to the Federal Communications Commission in a bid to block the proposed Comcast-Time Warner Cable merger.

In February, Comcast agreed to buy Time Warner Cable for $45 billion in a deal that would combine the two largest cable companies in the United States. The deal must still be approved by the FCC.

“The FCC should deny the proposed merger,” the WGA said in a brief filed with the FCC on Friday, noting that the merged entity “would control almost 30%” of the cable and satellite TV market.

Such a merger, the guild argued, “would give too much power over broadcast and cable networks. Comcast’s ability to blackout one-third of television viewers would force networks to agree to terms and rates set by Comcast, harming investment in programming.”

COMCASTA merged Comcast-Time Warner would also control approximately 30% of the broadband Internet market, the guild said, “giving the company the means to limit competition from online video providers like Netflix and Amazon. Comcast has already demonstrated its inclination for anti-competitive behavior by exempting its own streaming service from data caps when watched on an Xbox, while applying data caps to competing services.”

In economic terms, the guild told … Read More »

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Deadline Big Media 77 – CinemaCon Preview Podcast

By and | Thursday March 20, 2014 @ 3:21pm EDT

Deadline Big Media ep 77In this week’s podcast, Deadline Executive Editor David Lieberman and host David Bloom preview CinemaCon, the big annual gathering of theater operators in Las Vegas that puts the popcorn in popcorn movies. They also examine the NAB’s claims to the FCC of a faltering local TV business; update the Comcast-Time Warner Cable merger with news from the states; whistle through the highlights of the relatively quiescent Disney annual meeting; examine the implications of the recent settlement of the long-running Viacom-YouTube copyright lawsuit; and ponder what’s next for Yahoo, given the imminent stock IPO by Alibaba, which it partly owns.

Deadline Big Media podcast 77 (.MP3 version)
Deadline Big Media podcast 77 (.M4A version)

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Fears Of Government Rejection Hung Over Comcast’s Deal Talks With Time Warner Cable: Proxy

By | Thursday March 20, 2014 @ 11:10am EDT

That’s one of the nuggets that connoisseurs of corporate deals will find interesting in the proxy that Comcast and Time Warner Cable filed with the SEC this morning. Comcast-Time-Warner-Cable-logos__140213130107-150x150__140213191744Among other things, the document gives the public a first look — albeit a bloodless one — at the behind-the-scenes dramas that led to the $45.2B agreement. The proxy says that Charter Communications and its largest shareholder, Liberty Media, began to talk to TWC about their interest in acquiring the No. 2 cable operator on May 22, 2013.  TWC execs considered it too risky and began to talk to Comcast about an alternative arrangement in “mid-2013″ with legal reps meeting on June 27. On October 15  Comcast CEO Brian Roberts “indicated that Comcast might be interested in exploring a merger of Comcast and TWC” but also said that he had discussed the possibility of helping Charter. Conversations went back and forth until a series of  secret meetings on January 7 at International CES in Las Vegas: Charter CEO Tom Rutledge told Marcus that he was about to go public with his offer. Shortly afterward Marcus met with Roberts to bring him up to date. Later in the week Roberts said his conversations with Charter had “intensified.” Comcast management told its board, on January 12, that it preferred a collaboration with Charter. But Charter and Comcast couldn’t agree on terms, and broke off their talks on February 4. Read More »

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Time Warner Cable CEO Could Receive $80M Golden Parachute From Comcast Deal

By | Thursday March 20, 2014 @ 10:17am EDT

twcable1Time Warner Cable shareholders will have an opportunity to register their opinions about the golden parachute terms outlined this morning in the preliminary proxy for the proposed $45.2B merger sale to Comcast. rob_marcus_time_warner_cableBut the company can ignore the advisory vote about the terms that, if the deal goes through, could provide TWC chief Rob Marcus with a nearly $80M golden parachute that includes $20.5M in cash, $56.5M in equity, $400,000 in benefits, and $2.5M in a supplemental bonus. The document warns that the amounts reflect the values of the packages as of March 12 and, since stock prices could change, include totals “that may or may not actually occur.” But the amounts also could be higher: For example, the tally reflects a $958,909 target bonus for Marcus pro rated to assume he left on March 12. The exec, who rose to the top job in January, has an annual target of $5M. The proxy says that Marcus and other TWC execs likely can say that they have “good reason” to resign after the deal “and collect the above severance benefits.” The 2010 Dodd-Frank Act entitles shareholders to vote on an advisory basis on golden parachutes. The companies urge TWC stock owners to support the terms, but provide no rationale for doing so.  They add that since the vote “will not be binding on either TWC or Read More »

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State Attorneys General Plan To Scrutinize Comcast-Time Warner Cable Deal: Report

By | Wednesday March 19, 2014 @ 11:20am EDT

Comcast-Time-Warner-Cable-logos__140213130107-150x150__140213191744This typically happens in big cable system mergers, but still adds to the pressure on Comcast to make public interest concessions to win approval for its $45.2B acquisition of Time Warner Cable. Florida and Indiana are among the states confirming that they will investigate issues in the deal, Reuters reportsFlorida’s AG office told the news service that it is “part of a multi-state group” helping the Justice Department to investigate potential antitrust problems with the transactions. The AGs will mostly focus on issues involving broadband, not cable TV, an unidentified source said. It wasn’t clear whether Indiana was part of that group, but its AG office said that it will look the deal’s “potential impact in Indiana.” Thus far execs have mostly spoken publicly to friendly investor gatherings. They likely will face more sharp-edged questions April 2 when the Senate Judiciary Committee holds a hearing to explore the deal’s impact on consumers. 

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