Charter is 'naive' about DoJ concerns, analyst Greenfield says

Although most analysts expect federal regulators to approve Charter Communications' bid to simultaneously buy Time Warner Cable and Bright House Networks, BTIG Research analyst Richard Greenfield remains highly skeptical. In his latest blog post, Greenfield described Charter's public interest statement for the deal as "naive." In Charter's public interest statement, the company contends that cable companies operate in distinct regional markets, and that there is no national market for broadband. "The DoJ sees both video and broadband as national markets, with harms increasing with scale. The DoJ simply believes that bigger is badder," Greenfield wrote. He pointed to recent comments made by Nancy Rose, deputy attorney general for economic analysis for the Department of Justice, as bolstering his view.

"As you listen to the DoJ," the analyst adds, "it is very difficult to see how the government can approve the creation of a company nearly the size of Comcast (and given New Charter's growth, it could be larger than Comcast in a few years), particularly as it is far from clear what concessions would alleviate the government's underlying concerns without true competition materializing. … The DoJ believes there is fallacy in thinking about consolidation of cable as having no impact on competition just because they operate in geographically distinct markets with no overlapping customers."