I've been somewhat amazed how seriously people are taking the possibility that Comcast and Verizon could be the next big merger. The idea was floated by Verizon CEO Lowell McAdam last week alongside other similarly grand ideas like Disney and CBS, and since then analysts and journalists have been offering some up a few thoughts. One quote I have seen comes from BTIG Research:
"Imagine the regulatory outrage created by combining the largest wireline/wireless company that dwarfs all others. We have to imagine the same constituents that would oppose Comcast-Charter would oppose Comcast-Verizon. That being said, it does appear that regulatory approval would be easier than Comcast-Charter, given the lack of near-term substitution between wireline and wireless broadband."
I really don't get this. Comcast and Charter combining would certainly make fewer cable companies, but Comcast and Charter don't actually compete against each other directly. Comcast and Verizon, however, do. Having lived much of my life in the I-95 corridor in the northeast, nearly every home I've lived in has had precisely two options for broadband, tv, and/or telephony in the last mile. Three guesses what those two options are.... Fios and Xfinity go head to head in a staggering number of markets, and Google Fiber never made it anywhere near here.
Politics being what they are, it's currently hard to predict what regulators might actually do if presented with such a deal to review (or any deal for that matter). But it seems to me that a wireless deal that makes 4 into 3 or a cable deal that sees further consolidation there ought to be less problematic than collapsing the last mile duopoly across much of northeastern US. A move deeper into the media business may raise a few hackles, but nothing quite like that would. Would it?