Elevation Sees No Threat To Time Warner Cable/Comcast Deal

Time Warner Cable Inc's (NYSE: TWC) pending $45 billion merger with Comcast Corporation (NASDAQ: CMCSA) could be endangered by so-called net neutrality, but Democrats' diminished clout makes the deal safe, an analyst said Monday.

Elevation's Stephen Sweeney said recent mid-term elections leave Democrats lacking "political support" to push a plan that would ban companies from buying "fast lane" Internet service to deliver their content more quickly than competitors.

President Barack Obama called for banning the practice Monday through the reclassification of broadband services as an essential public utility.

Comcast tumbled nearly 4 percent to $52.47 per share. Time Warner fell as much as 4 percent earlier Monday, but traded recently up 0.8 percent at $77.57 per share.

Time Warner Chief Executive Robert D. Marcus said changing the rules will create unnecessary uncertainty, "leading to threats against the continued growth and development of the Internet."

Federal Communications Commission Chairman Thomas Wheeler said in September that three-quarters of consumers have "no competitive choice" in broadband services, which he called "essential infrastructure."

About 3.7 million comments favoring Internet neutrality were filed recently with Wheeler's agency.

But Sweeney said Monday that in the "unlikely event" that Comcast's deal falls apart, Charter Communications, Inc. would step in to acquire Time Warner's assets.

Sweeney advised investors to buy Time Warner "on any weakness."