As executives from Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) finally meet with U.S. Department of Justice officials Wednesday over their proposed $45.2 billion merger, the issue of how Comcast responded to conditions of its previous mega-merger has surfaced.
Specifically, as a mandate associated with the approval of its 2011 purchase of NBCUniversal, Comcast was ordered to act as a silent partner on Hulu, even though NBCU is a joint owner of the SVOD service, alongside The Walt Disney Company and 21st Century Fox.
According to the Wall Street Journal, Disney and Fox decided not to sell Hulu in 2013 after getting assurances from Comcast that it would make the service the "nationwide streaming platform of the cable industry."
This claim, that Comcast meddled with the fate of Hulu, is being looked at today by DOJ officials, who are considering lawsuits to block Comcast from executing its latest deal.
According to Bloomberg, the issue is among several that are influencing the Justice Department past the behavioral modifications imposed in the Comcast-NBCU merger. This time, the news service says, quoting inside sources, the DOJ is going to want hard, fundamental changes to the business, such as Comcast and TWC selling off broadband customers so that they control less than 57 percent of the market once the deal is done.
The DOJ is set to make some, or all, of these demands today, with Comcast and TWC executives said to be in listen-only mode. It is notable that Comcast is not on the hook for a breakup fee.
Concurrently, aides for Federal Communications Commission Chairman Tom Wheeler are set to brief the commission staff Wednesday on the state of the FCC's merger review. It was at this stage of the process, back in 2011, that the FCC sent the review for the proposed AT&T buyout of T-Mobile to a lengthy hearing--a decision that caused AT&T (NYSE: T) to back out of the deal.
To make matters even more daunting for Comcast and TWC, Sen. Elizabeth Warren (D-Mass.) has joined Sen. Al Franken (D-Minn.) and four other U.S. Senators ins asking regulators to block the deal.
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Update: This story was updated April 23 to correct a factual error that said the FCC sent the review for the proposed AT&T buyout of Sprint to a lengthy hearing. It was not Sprint, it was T-Mobile.