Will Net Neutrality Vote Make Approval of Comcast-TWC Merger More Likely?

Will the FCC’s vote to reclassify broadband as a public utility under Title II of the 1934 Communications Act make the agency’s approval of the Comcast-Time Warner Cable merger more likely?

Here’s why it will:

• The number one reason to think the FCC will approve the merger is that it’s the only way to ensure that the FCC doesn’t wind up empty-handed. If the Commission approves the merger, it can bake in all of its net neutrality rules as merger conditions, which will be enforceable even if the FCC loses in court on some or all of Title II reclassification and new rules. But if the FCC blocks the merger, it puts all its eggs in the basket of the court fight over Title II and the many other legal hurdles the FCC faces.

• The FCC went further than anyone expected, not only invoking Title II but also creating a sweeping “general conduct” or “catch-all” standard that could cover far more than traditional net neutrality violations. This can only help Comcast and TWC get their merger through.
• Politically, this will make it easier for the FCC to approve the merger by insulating FCC Chairman Tom Wheeler and President Obama from criticism from their base that they’re going easy on Comcast.

Legally, the general conduct standard, if it stands up in court, will allow the FCC ample power to address any and all concerns about the effects of the merger.

Here’s why it won’t:

• “Re-classifying” broadband as 25+ Mbps probably reduces the amount of competition Comcast/TWC face in the FCC’s eyes, particularly by excluding all but the fastest mobile wireless carriers, and may be used (inappropriately) to bolster an argument that “we need more broadband competition, not less.”
• The politics of the net neutrality fight certainly spill over (in spades) into the merger. While it’s true that the net neutrality vote gives cover, many of the same forces that pushed the FCC to such an extreme on net neutrality are also pushing for it to kill the merger. That it listened to them on net neutrality could mean it is likely to listen to them again on the merger.