When Comcast and Time Warner Cable first announced their $45.2 billion merger in February 2014, it seemed like all but a done deal. The nation’s two biggest cable companies did not compete geographically, so there was no reason–as their lobbyists told anyone who would listen–that the marriage would raise antitrust flags or be stopped.
Fourteen months later, the deal was dead. Regulators began to signal their discomfort last month, and on April 24, Comcast announced that it had withdrawn its bid, taken its toys and gone home. “Today, we move on,” wrote Comcast CEO Brian Roberts. So what happened?
Grassroots activists, who staged dozens of rallies in opposition to the merger, credited themselves. But the forces at play were far bigger. The media environment in this country–the way that we watch TV and use the Internet–simply changed faster than anyone expected.
By the end of last year, people ages 18 to 24 watched 27% less traditional TV than they had just three years earlier. Meanwhile, more than 40% of American households now subscribe to an online TV service like Netflix, and 13% have a special multimedia device that streams Internet video from channels like HBO and ESPN.
Comcast and Time Warner Cable tried to parlay this rapidly changing environment. With so many new online streaming services, they argued, cable TV had to combine in order to compete. But regulators called their bluff. You can’t, after all, watch TV online without a fast Internet connection. And 83% of Americans get a fast Internet connection through their cable company.
That’s the iceberg that sank the Titanic. The biggest cable merger in history, it turns out, wasn’t about cable at all. It was about high-speed Internet. A combined Comcast and Time Warner Cable would have controlled roughly 60% of all broadband Internet connections in the country.
“People began to understand that whether the cable companies competed with each other geographically was an outdated way of looking at what was going on,” said Robert Cooper, an antitrust expert and partner at Boies, Schiller & Flexner in Washington, D.C. “That paradigm might have held some sway in a world of old cable, but not anymore.”
This appears in the May 11, 2015 issue of TIME.