Boston, MA 04/09/2014 (wallstreetpr) – Time Warner Inc (NYSE:TWX) and Comcast Corporation (NASDAQ:CMCSA) recently agreed to a tie-up. The agreement is such that Comcast with takeover Time Warner at the cost of $45 billion. However, the companies must get regulatory approval for the deal to be implemented. However, that is where the challenge lies.
In order to secure regulatory approval for their tie-up, the companies must convince the Federal Communications Commission that the deal will not hurt customer experience. It therefore means that among other things, the companies must prove that they are not running competing businesses, a case which might result in reduced customer choices in the event of a tie-up.
Net neutrality to continue
When Comcast presented before regulators Tuesday, the company’s executive stated that they believe that taking over Time Warner is in the best interest of the consumers. In other words, they argue that the move will not limit competition in the markets they serve. Instead, Comcast EVP David Cohen said that the acquisition will allow the company to enhance its Internet speed to better serve Time Warner customers and even increase its net neutrality practice. In other words, the executive meant that they will not discriminate against other content providers.
The idea of net neutrality seems to be a key premise on which the companies are building their argument for a tie-up. When taking over the operations of NBCUniversal, Comcast agreed to net neutrality running through 2018. The company has maintained the practice even at a time when a court struck down net neutrality as a mandatory arrangement in the $30 billion deal to acquire NBCUniversal.
Comcast is now using the same to convince regulators to allow it join forces with Time Warner Inc (NYSE:TWX).
Time may spin off print division
As Time Warner Inc (NYSE:TWX) readies for a tie-up with Comcast if regulators allow the deal, the company is reportedly considering separation of its magazine division. The company is said to be considering spin off of Time Inc. This comes at a time when media companies are adjusting away from print business.
