Title II regulation will actually help Comcast-TWC merger chances, analysts say

While the "over-under" in recent weeks seems to have tilted against regulatory approval of the proposed Comcast-Time Warner Cable (NYSE: TWC) merger, a new wave of analyst comments compiled by Bloomberg seems to suggest that tighter, Title II-oriented reform of Internet regulation might actually help the deal's prospects.

With the Federal Communications Commission putting tighter regulation in place, agency decision-makers have political cover--despite Comcast's (NASDAQ: CMCSA) dominant market share in the broadband services arena, the FCC can say it now has the tools to regulate the conglomerate.

"The irony is that the strong regulations should improve their chances of getting the deal done," Daniel Ernst, an analyst at Hudson Square Research, told Bloomberg. "Once you have a strong set of rules in place, there is no legal reason to oppose it."

Further in the same Bloomberg report, Pivotal Research Group analyst Jeff Wlodarczak argues that merger naysayers are missing a critical component of the big picture--denying Comcast its deal will remove a key piece of leverage the FCC currently enjoys over the biggest ISP.

"Comcast has plenty of concessions that they can offer that would appear to give the president everything he is supposedly looking for," Wlodarczak told the news service. "Or the regulators can nix the deal--or effectively nix the deal by asking for far too aggressive concessions--and they will get nothing."

Bloomberg also notes that President Obama's desire to accelerate development of rural broadband also works in the merger's favor. If the FCC were to deny Comcast, Charter Communications (NASDAQ: CHTR) would likely swoop in and try to acquire TWC for itself.

Certainly, accepting concessions from Comcast would be a quicker route to achieving the administration's rural broadband goals. 

The Bloomberg report comes a week after prominent media analyst Richard Greenfield declared that the merger "will be blocked."

For more:
- read this Bloomberg story

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