Tying up the cable business

EMPLOYEES joining Comcast, America’s largest pay-television and internet provider, are given a copy of “An Incredible Dream”, a history of the company commissioned by the firm. On the cover is Ralph Roberts, its founder, standing with arms outstretched, like the Christ statue on Rio de Janeiro’s mountaintop. Comcast’s dramatic rise since 1963, when Mr Roberts bought a small cable system in Mississippi, is an inspirational American business story, and represents how tiny companies can become monumental ones. Today Comcast is run by Mr Roberts’ son, Brian, employs 140,000 people and has a market capitalisation of around $140 billion.

But when does “big” become “too big”? Regulators in Washington, DC, will have to decide. In February Comcast announced a $45 billion bid for Time Warner Cable (TWC), America’s second-largest cable company. Comcast has agreed to divest around a quarter of TWC subscribers voluntarily, leaving it with around 30% of the national pay-TV market and 40% of high-speed broadband should the deal go through, according to Moffett Nathanson, a research firm. Regulators at America’s Department of Justice and Federal Communications Commission (FCC) are reviewing the merger on antitrust grounds, with the FCC also assessing its impact on the public interest. They are expected to make a decision by early next year.