Charter Acquires Time Warner Cable, Promises It Will Suck Less Than Blocked Comcast Merger

Broadband

from the Godzilla-eats-Mothra dept

Driven by the relentless M&A lust of company chair and cable industry mainstay John Malone, Charter Communications has announced that the company will be spending $55 billion to acquire Time Warner Cable. Malone and Charter had been pursuing Time Warner Cable for two years, but found their ambitions blocked when Comcast made a better offer. With Comcast’s merger attempt blocked by federal regulators, Charter got a second chance. The deal was accompanied with the usual assortment of prepared CEO statements promising that this merger will surely be the one that magically makes the cable industry suck less:

“The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry…That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies,” said Tom Rutledge, President and CEO of Charter Communications. “With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully?featured voice products, at highly competitive prices.”

“With today’s announcement, we have delivered on our commitment to maximizing shareholder value,” said Robert D. Marcus, Chairman and CEO of Time Warner Cable. “This agreement recognizes the unique value of Time Warner Cable, and brings together three great companies that share a common philosophy of strong operations, great products, robust network investment and putting customers first.”

Yes, putting “customers first” is surely why Time Warner Cable has the worst customer satisfaction rankings not only in telecom, but in any U.S. industry. In fact, it’s exactly the cable industry’s relentless love for mergers and acquisitions that has resulted in cable operators growing so quickly, they’re unable to scale their customer service systems accordingly. Meanwhile, the lack of competition in many markets means there’s little incentive to actually improve, and any cost savings from greater size and leverage certainly won’t be passed on to consumers. Combine that with the job losses as companies eliminate redundancies, and you’ve generally got deals that benefit nobody outside of Wall Street.

While this deal probably won’t improve much of anything for cable customers, it’s generally agreed that it’s not as horrendously awful as the Comcast merger — simply because the combined company won’t have quite the same programming and advertising clout as mega-Comcast would have had. Comcast itself sent a short, two-sentence statement to the media saying the deal makes “all the sense in the world” (you know it must be good if Comcast signed off on it). In fact, reports suggest FCC boss Tom Wheeler personally called the heads of Charter and Time Warner Cable to assure them their deal would likely be approved.

That said, it’s still a massive deal. In addition to acquiring Time Warner Cable for $55 billion, the combined company will also be acquiring the nation’s sixth-largest cable operator: Bright House Networks, for an additional $10.3 billion. The new, combined company will serve 23.9 million customers in 41 states, and become the second largest cable operator in the nation behind Comcast. Surely it’s this merger that’s going to prod the cable industry to offer the kind of “competitive prices,” “state-of-the-art video experiences” and excellent customer service we’ve all been waiting for, right?

Filed Under: broadband, customer service, mergers, net neutrality
Companies: charter, comcast, time warner cable