If there is a limit to Americans' tolerance for media industry consolidation, we'll soon find out.

Wall Street applauded Comcast's ( CMCSA) uninvited $54 billion bid for Disney ( DIS) on Wednesday. Analysts cheered the combination of Comcast's cable properties with Disney's ABC, ESPN and other programming, saying they foresee no substantial legal or regulatory hurdles.

But how the deal plays in Washington and on Main Street may be another matter altogether. Combining the nation's largest operator of cable systems with a titan in TV broadcasting, TV programming and Hollywood could provoke a frenzy of opposition, observers say. Recall, for instance, the groundswell last year that upended the Federal Communications Commission's efforts to increase the number of broadcast television stations that a single network might own.

"This deal is highly likely to be approved by the FCC and the Justice Department," said Scott Cleland of the Precursor Group, a Washington tech consultant shop. "However, it's also likely to prompt a firestorm of objections from consumer groups and politicians worried about media concentration."

'Swollen Giant'

Those objections, in fact, have already emerged. The deal would give "too much power" to Comcast, says Jeff Chester, executive director of the Center for Digital Democracy. "Comcast is already the swollen giant."

It's a sign of Comcast's arrogance, says Chester, that the Philadelphia-based cable operator is announcing its offer for Disney on the same day of an important court hearing in Philadelphia. There, a group of major media conglomerates are seeking enactment of the FCC's relaxation of media concentration rules.

"This is a deal clearly beyond the pale of what's acceptable," says Chester. "This merger will be bitterly opposed by the hundreds of thousands of people who rose up against the FCC proposals last year."

Certainly, grand media mergers remain in style. Few executives appear to have been frightened away by 2001's disastrous merger of America Online and Time Warner ( TWX), or by Vivendi Universal's ( V) acquisition-induced near-bankruptcy last year.

Since then, Vivendi Universal has made its way toward merging its U.S. entertainment subsidiary, including the Universal film studio and theme parks, with General Electric's ( GE) NBC. That transaction would bring NBC into line with the other three major TV networks -- News Corporation's ( NWS) Fox, Viacom's ( VIAB) CBS and Disney's ABC -- as being among film-studio-owning media giants.

But Comcast's proposed deal more resembles News Corp.'s recent takeover, via its Fox ( FOX) subsidiary, of Hughes Electronics ( HS).

Synergies

Hughes, in its ownership of of direct broadcast satellite service DirecTV, gives News Corp.'s Rupert Murdoch what he has always wanted: a multichannel distribution system in the U.S. that gives him a pipeline into consumers' homes for all the film and television content that News Corp. and Fox create. (Murdoch said Thursday that he wouldn't bid for Disney.)

As Hughes CEO Chase Carey discussed with analysts Wednesday, linking DirecTV's distribution system with Fox's content creates ripe opportunities for value creation.

Similarly, the chance to join Comcast's distribution system with Disney's content means big opportunities for creating new value, as Comcast CEO Brian Roberts and Comcast Cable President Steve Burke -- a former Disney executive -- indicated in a press conference Thursday.

Starting with Comcast's own systems, which cover 21.5 million households, the combined company could make Disney cable programming, particularly its ABC Family channel, more valuable by getting it into more households, Burke said. The company could also launch new cable channels, he said.

Proof of how a cable operator could create value in a cable channel, Roberts said, lay in the QVC home shopping channel, which Comcast helped start from scratch. Comcast sold its stake in QVC to Liberty ( L) last year for $7.9 billion.

"When a cable channel is created and works, it creates billlions of dollars of value," Burke said.

Cleland and other analysts looking at the deal agree on the benefits of putting distribution and content under the same roof. "We regard Comcast and Disney as perfect merger partners," wrote Merrill Lynch's Jessica Reif Cohen in a note Thursday morning. "The rationale behind the merger is identical to the News Corp.-DirecTV combination, which is a combination of content and technology. In this case, Comcast's broadband technology is superior to satellite, creating even more opportunities."

Indeed, much of what makes Comcast-Disney more attractive than DirecTV-Fox to analysts -- and more bothersome to critics such as Chester -- is that Comcast's distribution system is simply bigger and more powerful than DirecTV's. DirecTV's 12.2 million subscriber count is less than three-fifths that of Comcast's. Comcast has 5.3 million high-speed Internet subscribers, giving it about one-fourth of the broadband market and making it the largest broadband subscriber. For DirecTV, offering widespread broadband Internet connections is off in the future, if it ever arrives.

"Comcast is in a much more dominant position" in the cable programming market than News Corp., Chester says.

Supply and Demand

In an effort to explain the consumer benefits of such a deal, Roberts characterized Comcast as a company that for decades has given consumers "more choice in television." As an illustration of that, he talked about how Comcast gives its customers in Philadelphia the opportunity to view a 3,000-hour library of programming on demand, enabling them to watch it whenever they choose. VOD has proved extremely popular with customers, he said, and the company is giving them further choice through technologies such as high-definition television and broadband Internet connections.

"Yeah, you can get there eventually," Roberts said, "But if you're in one company working together, it accelerates that."

Whether the voting and letter-writing public agrees with Roberts' vision of choice -- as opposed to a contrasting vision of choice that prefers more media companies, not fewer -- remains to be seen. The upsurge of protest that got in the way of loosened media concentration rules last year may rise again. And the politicians who heeded their cries last year again may latch onto the issue again as they strategize during this election year.

"The antitrust precedent set by the approval of the News Corp.-Hughes/DirecTV deal suggests that Comcast-Disney would pass antitrust muster," wrote Legg Mason's Blair Levin and David Kaut Thursday.

"There will, however, likely be a huge political reaction," the analysts added. "We would not be surprised to see bills introduced in Congress that seek to block or condition such a deal. The fact that it would be reviewed in a presidential election year, in what could be a close race, adds to the volatile nature of the deal, though final consideration would likely not come until after the election.

"So there is a political risk that actions in Washington could affect the value of the deal," the Legg Mason analysts concluded.