/// Charter Poised to Become Second Largest Cable Company
If Comcast wins regulatory approval to buy Time Warner Cable, Charter Communications is poised to become the second largest cable operator, thanks to a complicated series of deals announced Monday morning. The deal will reduce Comcast's post-merger subscribers holdings by 3.9 million to be less than 30 percent of national cable subscribers, a promise it made to regulators when it announced the $45 billion deal to acquire Time Warner Cable. Although the 30 percent cap is not a legal limit, it's a comfort zone for regulators that tried to make it law over the years. Charter will pay cash to acquire 1.4 million Time Warner Cable subscribers, increasing its video subscriber base from 4.4 million to about 5.7 million. Charter and Comcast will also swap video assets serving 1.6 million Time Warner Cable customers and 1.67 million Charter customers. Separately, Comcast will spin off 2.5 million Comcast customers to form a new, independent, publicly traded company that will be two-thirds controlled by the shareholders of Comcast-Time Warner Cable and one-third owned by Charter. Comcast itself will hold no ownership interest in the new entity and will not manage it. “Today's agreement follows through on our willingness to divest subscribers, while also making an important step in our merger with Time Warner Cable,” said Brian Roberts, chairman and CEO of Comcast. “The realignment of key cable markets achieved in these transactions will enable Comcast to fill in our footprint and deliver operational efficiencies and technology improvement,” he said. The series of deals will boost the merged Comcast-Time Warner Cable footrpint in some of the nation's largest markets, including New York, Boston, Dallas-Ft. Worth, Atlanta, northern and southern California, Tennessee, and North Carolina. Charter's footprint will get a big makeover, adding systems in Ohio, Kentucky, Wisconsin, Indiana and Alabama, and divesting systems in California, New England, Tennessee, Georgia, North Carolina, Texas, Oregon, Washington and Virginia. The third company that the series of transactions will create, will operate in markets that are adjacent or contiguous to Charter markets. The footprint is configured to make it easy for Charter, which will own one-third of the company, to provide operating, management and marketing services to systems in Michigan, Minnesota, Indiana, Alabama, Eastern Tennessee, Kentucky, and Wisconsin.