Most investors still seem to believe the market-reshaping Comcast-Time Warner Cable merger will happen. But as this New York Times analysis points out, the betting line is shifting, with some saying the odds of completion are now slightly lower.
Beyond the normal regulatory scrutiny a $45 billion transaction merits, the deal is complicated by shifts in the broader regulatory approach toward Internet delivery at large in the U.S.
So far, most of the focus has fallen on FCC chairman Tom Wheeler’s embrace of the so-called Title II provisions of the Communications Act as a legally defensible foundation for network neutrality regulation. But another move by the FCC could also have an impact. It’s the reclassification of “broadband” as an Internet delivery network capable of hurtling IP packets down the pipe at an impressive rate of 25 megabits per second (and back upstream at 4 Mbps).
The relative quiet surrounding this reclassification is surprising, given the stakes here. In a single bureaucratic stroke in late January, the FCC changed the dimensions for the U.S. broadband marketplace. The old definition used a downstream data rate of a now-quaint 4 Mbps downstream/1 Mbps upstream, meaning any last-mile provider with a middling Internet service was deemed to be playing in the broadband sandbox. And of course, almost everybody was.
With the sudden elevation to 25 Mbps, though, the game changes.
So will the concentration-of-share metrics. In particular, the cable industry’s share of the redefined U.S. “broadband” market will rise markedly as a function of the industry’s own network investments and competitive differentiation achievements. Although…