(Reuters) - Staff attorneys at the Justice Department's antitrust division are nearing a recommendation to block the proposed $45 billion merger of Comcast Corp and Time Warner Cable Inc, Bloomberg reported on Friday, citing people familiar with the matter.
A spokesman for Time Warner Cable questioned the report, saying the company had been working productively with both the Department of Justice and the Federal Communications Commission.
"We’ve had no indication from the DoJ that this is true," the spokesman said.
Bloomberg said that Justice Department attorneys investigating the deal are citing concerns for consumers as they lean against it. Their review could be handed in as soon as next week, people familiar with the matter told Bloomberg. (bloom.bg/1CUPx9V)
The final decision would be made by senior officials.
Time Warner Cable shares closed down 5.4 percent at $149.61 on the New York Stock Exchange while Comcast shares ended down 2.1 percent at $58.42 on Nasdaq.
A source close to Comcast said that discussions with the DOJ had been positive and that the Federal Communications Commission was still gathering material from companies, making it early for any discussion of conditions for a deal.
The FCC, which as well as the Justice Department is reviewing the deal, earlier this month paused the informal countdown toward its decision as it awaited a court ruling related to how it should handle disclosures of some documents.
The FCC pause would push the conclusion of the regulatory review to the middle of the year, a Comcast executive said in a March blog post.
"There is no basis for a lawsuit to block the transaction," a Comcast spokeswoman said in an emailed statement on Friday, adding that expected benefits to both consumers and businesses from the deal "...have been essentially unchallenged in the record - and all can be achieved without any reduction of competition."
The deal has faced severe scrutiny from several media companies and executives since its initial announcement over a year ago.
On Friday, a coalition of companies, associations and public interest groups sent a letter to FCC Chair Tom Wheeler opposing the merger.
"The combined company would, among other things: control over half of the high-speed residential broadband connections in the United States; dominate pay-TV across the nation; combine even stronger distribution muscle with NBC-Universal’s “must-have” video programing; and control critical advertising and set-topbox inputs," the letter stated.
"... the Commission should reject this merger because it would result in too much power in the hands of one company."
Reporting by Malathi Nayak and Jennifer Saba; Writing by Bernard Orr; Editing by Leslie Adler