Feds won't allow Charter to buy TWC either, analyst says

With the recent passage of Title II-based Internet regulation showcasing a heavy-handed political climate in Washington as it relates to cable broadband, Charter Communications (NASDAQ: CHTR) will likely run into the same regulatory hurdles that Comcast (NASDAQ: CMCSA) did if it continues its quest to buy Time Warner Cable (NYSE: TWC).

So says media analyst Richard Greenfield, who wrote in a post on Fortune Tuesday that the cable industry are "not being good listeners" in regard to the regulatory language being spoken by lawmakers these days.

"The dramatic shift in the political climate and consumer sentiment drove us in late 2014 to view Title II broadband reclassification as inevitable, convinced us that Comcast/TWC would be blocked in February 2015, and now leads us to believe Charter Communications will not be able to buy TWC, not to mention the possibility that the Department of Justice may look to break up Comcast," Greenfield wrote. 

As supporting evidence, Greenfield cites several comments made by President Obama, who noted in November that "Cable companies can't decide what online stores you can shop at, or which streaming services you can use and they can't let any company pay for priority over its competitors."

Greenfield added that cable companies are still examining the regulatory reactions to their M&A through a "video-centric lens" and not focusing on the implications of having their broadband subscriber bases usurp their TV customer footprints. 

He noted, "Most Americans enjoy television, with the cable industry having invested heavily to extend the reach of over-the-air TV beyond the bounds of antennas. Given the reach of over-the-air TV and the proliferation of multichannel video competition to the cable industry (first from satellite, then telecommunications such as Verizon, AT&T, and now Google Fiber and Internet-based video providers such as Sling TV and Sony Vue), the risks posed by video consolidation are relatively minimal with the courts twice striking down legislation to limit marketshare held by video distributors to 30 percent of all U.S. subscribers."

For more:
- read this Fortune post

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