By Brent Kendall And Shalini Ramachandran 

WASHINGTON--For enforcers at two federal agencies reviewing the deal, 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.

Justice Department 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. At the Federal Communications Commission, staffers were in close contact with FCC Chairman Tom Wheeler as its investigation progressed, and he reached a firm conclusion well before this week that the deal wasn't in the public's interest, an FCC official said.

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 the Justice Department and the FCC 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.

The companies weren't informed at Wednesday's meeting that Mr. Holder had given his blessing for a lawsuit.

Over at the FCC, an official said staffers investigating the deal began to sum up their research in recent weeks and reached two main conclusions: Comcast's claimed benefits for the deal were slight, while the potential risks posed by the transaction were large.

FCC staff this week recommended the commission refer the transaction for review by an administrative law judge, a move that would effectively kill the deal. The commission's stance was a major factor prompting Comcast to drop its pursuit of regulatory approval.

Officials at both agencies 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, government investigators believed. Both agencies 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 and Shalini Ramachandran at shalini.ramachandran@wsj.com

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