Light Reading

Comcast, Charter Talking Turkey?

Alan Breznick
4/21/2014
50%
50%

Charter Communications may end up with a nice chunk of Time Warner Cable after all.

Charter Communications Inc. and Comcast Corp. (Nasdaq: CMCSA, CMCSK) are exploring the transfer of at least 3 million cable subscribers from Comcast to Charter if Comcast's pending $45.2 billion purchase of Time Warner Cable Inc. (NYSE: TWC) passes muster, according to several news reports over the holiday weekend. The subscriber selloff could be worth up to $20 billion, cutting the cost of the TWC deal for Comcast while enabling Charter to nearly double in size.

Sources told both the Financial Times and Reuters that the Comcast-Charter talks are serious but still in the early stages. And, not too surprisingly, none of the three MSOs involved are commenting on the news reports right now.

But a deal between Charter and Comcast would make sense for several reasons. First, it would give Charter more of the size and scale it has been feverishly seeking in one fell swoop. It would be very difficult for Charter, which now has 4.2 million basic cable customers, to add another 3 million or more subs through a series of smaller acquisitions. (See What's Next for Charter?)

Moreover, such a sizable deal with Comcast would likely give Charter one or more major metro clusters in the US, something which it dearly lacks now beyond its former St. Louis hometown base. Although it's not known which cable systems Comcast and Charter might be discussing, some possibilities include TWC's systems in Wisconsin, Texas, and the Carolinas, where Charter also has some concentration.

From Comcast's perspective, a deal with Charter could assuage regulatory concerns in Washington, DC and some state capitals about the huge cable monolith that a Comcast-TWC merger would create. While Comcast has pledged to sell cable systems with 3 million subscribers to cap the new company's size at about 30 million video customers, or no more than 30% of the US pay TV market, an actual agreement to do so would undoubtedly generate more trust in Comcast's intentions. (See Comcast-TWC Deal: Playing All the Numbers.)

In addition, a nice little deal on the side with Charter would remove Charter as a potential thorn in the side of the deal. While Comcast is offering far more money for TWC than Charter ever did and TW Cable's board has accepted Comcast's terms, Charter has not yet dropped its own hostile $37.3 billion takeover offer for TWC. So Charter could still make trouble for Comcast's grand plans if it were so inclined.

Besides, why raise the ire of John Malone, Charter's powerful backer, if it can be avoided? After all, what's a mere $20 billion between friends?

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/21/2014 | 7:08:13 PM
Brilliant!
Brilliant move by Comcast and TWC. It reduces regulator objections and turns an enemy of the deal into an ally. A strategy worthy of the Lannisters on Game of Thrones!
Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
4/21/2014 | 4:00:48 PM
Re: Just dandy
I agree that a deal like this could help ease things with regulators. However, expect more of the regulatory complaints to come from the likes of CBS and Disney, not from other cable companies. It's an issue of control of content AND distribution.

 

I also agree subscribers will wind up on the short end. Don't they always? The big guys keep getting bigger with more power. Howard Beale on Network had it right.
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
4/21/2014 | 2:20:28 PM
Just dandy
OK, Charter would win in such a deal, Comcast would be even a bigger win--I guess the only loser would be Comcast subs. I'm sure the regulatory folks will love such an arrangement.
More Blogs from Breznick Unbound
Comcast co-founder and longtime CEO Ralph Roberts leaves behind a lasting legacy of business success and integrity after passing away Thursday night at the age of 95.
Light Reading and SCTE are joining forces to create multimedia content about a number of key cable tech topics, starting with DOCSIS 3.1, WiFi and IP video.
In LR's inaugural BTE Video Summit, speakers will look at how the video industry is changing and how service providers can cope with those changes.
At the Gigabit Cities Live confab in Atlanta, speakers and participants float suggestions for the nation's first Gigabit State.
Despite the dire warnings of top telco and cable execs, Gigabit service rollouts and announcements have only sped up since the FCC passed its Title II rules less than three months ago.
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (7) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones