One of the top executives of Twenty-First Century Fox Inc has raised questions about Comcast's potential dominance of the U.S. broadband Internet market if regulators allow its $45.2 billion merger with Time Warner Cable to be completed.
Speaking at an investor conference on Tuesday, Chase Carey, Fox president and chief operating officer, said the "broadband issue" will be front and center when U.S. regulators review the tie-up that merges the No. 1 and No. 2 cable operators.
Asked about concerns over the merger, Carey said, "Probably the issue that will come out of it, and that will ultimately get focused on, is really the broadband issue. Is there choice in broadband? Are you really headed toward every home having simply one broadband provider, and what are the implications of that?"
If its bid for Time Warner Cable is approved, Comcast would be the Internet provider to about 40 percent of U.S. households paying for high-speed Internet access, analysts estimate.
As TV service becomes more personalized with new navigation tools and targeted advertising, broadband infrastructure, and who controls that service, will become even more critical, Carey said. There has not been any pushback so far from companies against the deal, he added.
"We haven't seen any filings yet and how does that get addressed? I assume there will be aspects of that that are addressed," he said.
"Potentially, you may have for most of the country, simply one wired broadband pipe and again that's the piece that will get, at the end of the day, most focused on," he said.
Comcast did not respond to a request for comment.
Also at the same conference, Time Warner Inc Chief Executive Jeff Bewkes predicted a government role in bolstering post-merger competition.
"In the longer run there are some questions on competition that any deal like this will look at, the government will look at and make sure the appropriate conditions are in place to optimize competition," Bewkes said.
DirecTV's CEO Mike White, who was already called for regulatory scrutiny of the deal, said on Tuesday, that the government will likely focus on "all the aspects of Internet, from net neutrality to you name it."
He also said the government should consider whether Comcast is a national business instead of a local one which "requires the government to take a different perspective."
Once Comcast files its merger documents with regulators, the Justice Department and the U.S. Federal Communications Commission will both take months to review the merger's impact on competition, focusing on antitrust and public interest concerns respectively.
(Reporting by Liana B. Baker; Editing by Nick Zieminski and Cynthia Osterman)