Could Comcast-Time Warner Cable merger go the way of TCI-Bell Atlantic?

[Commentary] On Feb 24, 1994, Verizon predecessor Bell Atlantic and John Malone's Tele-Communications announced that they had agreed to cancel a $33 billion merger agreement.

As the industry weighs the impact of Comcast's merger agreement with Time Warner Cable, I thought it would be good to take a look at what happened to the TCI-Bell Atlantic deal, and whether there are lessons from that failed merger that would be useful to consider when we gauge the prospects of Comcast closing its deal to acquire Time Warner Cable. TCI, which was the biggest US cable operator at the time, announced its merger agreement with Bell Atlantic -- one of seven Baby Bells that were created after AT&T settled an antitrust suit in 1982. Harvard Business School Professor Thomas Eisenmann describes the motivations for the TCI-Bell Atlantic deal, and why it fizzled, in a case study he published in 1999 about TCI. "The Bell Atlantic deal was motivated by a concern that the Clinton Administration would promote competition on terms unfavorable to cable. Malone and [the late TCI founder Bob] Magness felt that TCI needed a strategic partner with capital, technology, and political clout. However, the merger fell apart after Bell Atlantic's stock price declined by over 20 percent in the wake of the announcement, due in large part to shareholders' concerns that the company would cut its dividend to fund ambitious upgrade plans. Malone was also concerned that Bell Atlantic and TCI would have been forced to make unreasonable concessions to the government to secure regulatory approval for the merger," Eisenmann wrote in his TCI case study, titled "Cascading Miracles."