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Comcast's merger faces huge challenges from government regulators.Reuters

In a surprise sudden development, cable giant Comcast plans to drop its $45 billion merger deal with Time Warner Cable with observers citing overwhelming challenges from government regulators.

The deal began to crumble one day after a series of meetings between the companies and government regulators. The officials shared a long list of reservations about the merger and indicated they were considering action to block it, said Bloomberg, citing sources that the deal is dead. Analysts at the Federal Communication Commission (FCC) are concerned that the mega-union would stifle competition and innovation, and wouldn't serve the public interest.

The merger seemed like a done deal when plans were announced a year ago. But the FCC and Department of Justice pored over the details for months. FCC staffers were recommending that the merger be considered by an administration law judge, a source told CNN. Such a hearing would take additional months, effectively becoming a deal killer. The commission would have to vote on such a hearing, but with three Democrats and two Republicans it would likely back the action.

Comcast's board has to meet to finalise termination of the deal, but an announcement could be made before the weekend, according to Bloomberg.

The deal would have reshaped the landscape of American media by giving Comcast unique control over the market for broadband Internet. Eyes may turn now to other possible Time Warner suiters, including smaller Charter Communications, a previously interested partner.

Comcast is the number one provider of cable TV and broadband in the US with over 20 million subscribers. The company aimed to gain more subscribers through the merger in markets like New York and Los Angeles.