FCC starts review of Charter's TWC and Bright House deals

The FCC announced that it has begun a review of Charter's (NASDAQ: CHTR) proposed purchases of both Time Warner Cable (NYSE: TWC) and Bright House Networks.

The cash and stock deal involving TWC, which is valued at $78.7 billion, will be reviewed simultaneously with Charter's $10.4 billion takeover of privately held Bright House. Charter is purchasing TWC for $56.7 billion.

The regulatory response to the Charter deals has been relatively swift, considering the FCC didn't get rolling on its review of the now-scuttled Comcast-TWC deal, first proposed in February 2014, until August 2014.

Analysts believe that the so-called "New Charter" will not present the monopolistic broadband threat to regulators that the proposed Comcast-TWC did. Further, the fact that Charter's cloud-based video delivery infrastructure is essentially open to outside development, unlike Comcast's (NASDAQ: CMCSA) X1 platform, could bode well for the new deal.

"We believe the market is doing the opposite of what it did on the Comcast deal," New Street Research's Jonathan Chaplin told investors. "With Comcast, it underestimated the regulatory risk. With Charter, it is overestimating that risk. We think we have a pretty good idea of why the government rejected Comcast's transaction and that Charter, while raising some similar issues, will not present the same level of harm."

"Not only would Charter's number be significantly below the combined Comcast/TWC number, Charter's statements on a number of issues where the fear of blocking occurred, suggest it understands how it needs to structure its relationships with others to gain approval," he added.

For more:
- read this FCC public notice

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