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 A formal announcement is expected as early as Friday, the person
added, asking not to be identified because the deliberations are
confidential. Comcast and Time Warner Cable declined to comment.
The news came a day after officials of Comcast and Time Warner
Cable, the two largest U.S. cable companies, met with reviewers at
the Justice Department, which is considering whether the deal would
harm competition, and the Federal Communications Commission, which
is considering whether the deal was in public interest.
Both agencies signaled reservations, though sources told Reuters it
was the FCC's strong stance that particularly tipped the scales to
drop the deal, which carries no break-up fee.
FCC reviewers told the agency staff at a Wednesday briefing that
they planned to recommend taking the merger issue to an
administrative law judge for a hearing, which would amount to the
FCC blocking the deal.
That was the latest flex of muscle by the FCC under Chairman Tom
Wheeler, who recently imposed the strictest-ever regulations on
Internet providers and in 2014 helped scuttle a potential merger
between wireless carriers Sprint Corp <S.N> and T-Mobile US
<TMUS.N>.
 Bloomberg first reported on Thursday that Comcast planned to drop
its merger offer in the face of opposition from regulators. The
Justice Department's antitrust attorneys were also nearing a
recommendation to sue to block the merger, Bloomberg reported.
INTERNET AND VIDEO CONCERNS
The Comcast-Time Warner Cable deal has faced vocal criticisms from
some politicians, media company executives and diverse consumer and
industry groups, who worried it would create a massive monolith with
too much control over what Americans do online and watch on TV.
The merger would create a company controlling less than 30 percent
of the U.S. pay-TV subscribers, following promised divestitures. It
would provide high-speed Internet access to almost 40 percent of
Americans, according to SNL Kagan data.
"This transaction would create a telecom behemoth that would lead to
higher prices, fewer choices and even worse service. We need more
competition in this space, not less," said U.S. Senator Al Franken,
a Minnesota Democrat and a vocal opponent, who called the news of
potential collapse a victory for consumers.
Though the two companies largely do not compete against each other,
opponents, including Dish Network Corp <DISH.O> and Netflix Inc
<NFLX.O>, have been drilling into the combined company's broadband
reach and raising concerns about its potential gate-keeping power
over the online video market, among others.
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LOBBYING HEAVYWEIGHT
Comcast had argued the deal would bring faster service and better
video services to more Americans, and it has sounded positive notes
about the merger's fate until the last minute.
A heavyweight power broker in Washington, Comcast has spent $21.3
million to lobby on the merger and other matters since the first
quarter of 2014, when the deal was announced, according to
government disclosures. Comcast's chief executive, Brian Roberts,
personally spoke with the FCC's Wheeler as recently as Monday,
filings at the agency on Thursday showed.
"I thought (opposing the merger) was an uphill battle and a real
long shot," said Gene Kimmelman, president of Public Knowledge, a
public interest advocacy group that fought the deal. He said Wall
Street would now reconsider some aggressive deals.
If the deal falls through, investment bankers also look to suffer as
they are worried about whether they will get paid, with smaller
advisory firms particularly on edge. [ID:nL1N0XH2NM]
Charter Communications Inc <CHTR.O> had previously lost out to
Comcast in a bid to acquire Time Warner Cable.
A Charter spokesman had no comment on the Comcast-Time Warner Cable
deal or what Charter might do next. However, Charter's controlling
shareholder, Liberty Media Corp <LMCA.O>, has indicated continuing
interest.
At an investor day last November, when asked if he would pursue Time
Warner Cable if the Comcast bid fell through, Liberty Media Chairman
John Malone said, "Hell yes."
Greg Maffei, chief executive of Liberty Media, had no comment on
Thursday.
Shares of Comcast closed up 0.8 percent at $59.23 and Time Warner
Cable closed down 0.6 percent at $148.76. Charter shares closed down
0.7 percent at $183.58.
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