By Alina Selyukh and Malathi Nayak
(Reuters) - A potential bid by French telecom group Altice SA to buy U.S. cable company Time Warner Cable Inc (NYSE:TWC) would pass regulatory hurdles more easily than an offer pondered by cable rival Charter Communications Inc (NASDAQ:CHTR) , according to analysts and experts.
Altice, controlled by French billionaire Patrick Drahi, on Wednesday agreed to buy regional U.S. cable company Suddenlink. It has also approached Time Warner Cable for a deal, according to people familiar with the talks.
The moves come as Time Warner Cable, the second-largest U.S. cable provider, is being circled by smaller rival Charter after Comcast Corp (NASDAQ:CMCSA), the biggest U.S. cable operator, failed to get government approval for a merger over concerns that it would control Internet access of too many Americans.
Some analysts see regulatory hurdles for a possible Charter-TWC deal, especially after Federal Communications Commission Chairman Tom Wheeler earlier this month said "more competition would be better" for cable companies providing broadband Internet.
"Does the government want to create another Comcast?" BTIG analyst Rich Greenfield asked in a recent note on a possible Charter-Time Warner Cable merger. His answer leaned toward a no.
A merger of Charter and Time Warner Cable, with other related deals, would eliminate one of the country's top Internet providers and control more than 20 percent of the broadband market, according to data from MoffettNathanson.
Altice is a new entrant to the U.S. market. With Suddenlink, the seventh largest U.S. cable company, and Time Warner Cable, it would control less than 15 percent of the broadband market, according to the data.
"To the extent that the Charter-Time Warner Cable deal raises regulatory concerns because they're still one of the largest domestic broadband companies, Altice doesn't bring any of that baggage," said Harold Feld, a veteran telecom observer at consumer advocacy group Public Knowledge.
The Comcast-TWC deal would have created a behemoth Internet provider with roughly 40 percent of the U.S. high-speed Internet market. U.S. regulators have not commented specifically on any new potential deals.
New Street Research analysts argue that Comcast's failed merger does not portend broader regulatory opposition to cable consolidation, giving Charter an opportunity to offer online video protections to ease potential regulatory review.
Plus, a combination of TWC with Charter would offer more cost savings, New Street's Spencer Kurn said.
"You're combining two players with much greater scale and there's more synergy value that you can create."
As a foreign company, Altice would face additional review from national security and telecommunications officials, which experts say could lead to criticism from opponents, but ultimately not pose a challenge.