The FCC voted 3-1 for the deal over the objections of consumer groups, which filed a motion last week asking the agency to delay its decision. The groups claim the new cable giant would limit customers' choices in television viewing and Internet access.
But FCC Chairman Michael Powell said "the benefits of this transaction are considerable, the potential harms negligible."
Commissioner Michael Copps, the panel's only Democrat, voted against the deal.
"The sheer economic power created by this mega-combination and the opportunities for abuse that would accompany it outweigh the very limited public interest benefits," he said.
Comcast, the nation's third-largest cable operator with about 8.5 million subscribers, would acquire ATT Broadband, the largest cable operator, to form a new ATT Comcast with 22.3 million subscribers.
The new company would control 29 percent of the market and have nearly twice as many customers as the No. 2 cable company, AOL Time Warner Inc.
FCC approval was the final hurdle for the companies, which proposed the merger in December. The deal, originally valued at $47 billion in stock plus assumption of about $25 billion in debt, has declined in value by about 35 percent as Comcast's shares have fallen along with the rest of the market over the past year.
The companies have said an exchange of $11.8 billion in ATT bonds for ATT Comcast notes -- part of the transfer of $20 billion worth of debt from ATT to the new company -- was completed Monday.
The companies announced last month that as operations are merged, 1,700 jobs identified as redundant will be cut at ATT Broadband's headquarters in Englewood, Colo.
ATT Broadband has about 40,000 employees and Comcast Corp.'s cable division has about 20,000.
Consumer groups said in their motion to the FCC that creation of such a large cable company would reduce competition, resulting in higher rates, less diverse programming and fewer choices of high-speed Internet service providers available via cable.
Comcast and ATT Broadband disagreed and said they "have repeatedly stated on the record that they have not and will not restrict their subscribers from accessing any content available on the Internet."
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