Report: Regulators lean toward blocking Comcast deal

WASHINGTON - Comcast critics cautiously cheered Friday after a report that federal antitrust lawyers may soon recommend blocking the Philadelphia company's proposed merger with Time Warner Cable.

Justice Department staffers are nearing a recommendation to oppose the $45 billion deal that would combine the nation's largest and second-largest cable and Internet companies, Bloomberg News reported, citing unnamed sources familiar with the antitrust review.

But a Comcast spokeswoman said "there is no basis for a lawsuit to block the transaction," which the company says will not reduce competition.

"The Comcast/Time Warner Cable transaction will result in significant consumer benefits," spokeswoman Sena Fitzmaurice wrote in an e-mail.

Critics, who say the deal would give Comcast too much power, have privately said they believe momentum is on their side, but they are careful not to declare victory.

The Stop Mega Comcast Coalition said that the report "is encouraging" but that the federal review is ongoing, "so we intend to continue to vigorously advocate for the formal rejection of this merger."

One critic close to talks over the deal said the report "strikes me as pure conjecture."

A Department of Justice spokesman declined to comment on the report.

A recommendation from Justice staffers would not be the final word. Their superiors would have to decide whether to fight the merger.

Three Comcast opponents familiar with discussions between federal officials and critics of the deal said the report matches their collective sense that regulators are leaning against the merger.

One said that Department of Justice and Federal Communications Commission staffers have seemed receptive to the criticisms being raised. The same person described the federal review as being in "the late innings," but with the game still in the balance.

None would discuss the private meetings on the record.

The merger approval process is opaque, and critics' interpretations come from reading signals rather than direct knowledge of officials' plans.

The very existence of the Bloomberg report, however, could create a dilemma for federal decision-makers: If they approve the deal now, they could face criticism that they reversed course under pressure from Comcast's extensive political operation.

The federal review comes in two parts: The Justice Department decides whether the deal violates antitrust law, while the FCC evaluates whether it serves the public interest.

If Justice opposes the deal, it would have to file a lawsuit and make a case that the merger runs afoul of antitrust law.

At the FCC, however, Comcast has the burden of proving that its deal is in the public interest. The two government agencies are said to be working closely in tandem.

Skeptical regulators could also allow a deal to move forward but impose conditions on the companies.