WASHINGTON--For antitrust enforcers at the Justice Department,
Comcast Corp.'s bid to acquire Time Warner Cable Inc. raised one
overarching concern: the combined firm could use its power over
broadband to impede the expanding marketplace for online video
programming that is upending the traditional cable model.
Antitrust officials briefed Attorney General Eric Holder on the
merger two weeks ago, outlining their concerns over the $45.2
billion deal. Mr. Holder authorized them to file a lawsuit
challenging the cable tie-up, a Justice official said Friday.
Mr. Holder's authorization was part of the process for building
a case. The department's antitrust division hadn't made a final
decision on whether to file suit when Comcast walked away from the
transaction after meetings at Justice and the Federal
Communications Commission on Wednesday, the official said.
Comcast's decision to drop the deal "is a victory not only for
the Justice Department, but also for providers of content and
streaming services who work to bring innovative products to
consumers across America and around the world," Mr. Holder said in
a written statement Friday.
The department was planning to engage in further discussions
with the companies, but was nearing the conclusion the cable giants
couldn't have offered concessions that would have fixed competition
problems raise by the deal, the official said.
Justice Department officials were focused on the fact that a
combined Comcast-Time Warner Cable would have about 57% of the
broadband market. That amount of control over the nation's Internet
pipes would have given the firm the ability to restrain companies
such as Netflix Inc., Amazon.com Inc. and Google Inc. that deliver
programming over broadband, the department believed. Antitrust
officials also believed a bigger Comcast could have made it harder
for TV channel owners to offer video programming directly to
consumers over the Internet.
"If you have close to 60% of the high-speed eyeballs, that's a
pretty big gateway," the Justice Department official said.
Write to Brent Kendall at brent.kendall@wsj.com
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