Charter was the first company to make a play for TWC. Now reports are in that Charter is chasing Bright House. Comcast is still waiting for its three-way deal with TWC and Charter to pass regulatory. The FCC paused the clock again today.
The history of cable is consolidation. WOW! and Knology. Comcast is a mashup of many cable including Adelphia (in a convoluted deal with TWC in 2006).
But convoluted is the way cable systems merge. See the Washington Post-Cable One deal details here or the History of AT&T’s cable assets. This activity results in many cable companies with a rather small number of subscribers (2 million and less, way less!) spread over many states. For example, Cable One services 730,000 customers in 19 states with cable television.
TWC and Bright House have an incestuous relationship that dates back to BHN’s origins.
“Bright House Networks has been an odd duck among cable companies since it was created from cobbled-together systems originally owned by Vision Cable, Cable Vision, TelePrompTer, Group W, Paragon and others. In the 1990s and early 2000s, Time Warner effectively ran the cable systems still owned by the Newhouse family. After the AOL-Time Warner merger, Advance/Newhouse decided to take back control of the management and operations of its cable systems, relaunching them under the Bright House Networks brand.” [source]
The WSJ has good detail about the TWC-BHN deal.
Comcast, TWC and BHN all owned SpectrumCo that acquired some spectrum that it sold to VZW in a deal that meant VZW would co-market cable services for them. Like Sisters. And the cable sisters even booth together at expos. (If AT&T and VZ had a booth together, lawyers and rumors would be flying.)
I think these inter-connected relationships will likely have to be taken into account along with the resulting buying power and market share. That leads to me guessing this merger is not going to go through. Comcast is already twice the size of TWC and more than 5x the size of Charter. Should the the largest ISP in the US have 30M while the number 2 has at most 9M (if Charter gets BHN’s 2 million and some of TWC)???
AT&T’s acquisition of DirecTV is still in limbo as well. It might be that the FCC and DOJ have to take a long look at the consolidation and power of these ISP-and-TV providers. Right now Comcast, DirecTV, DISH and TWC have the most negotiation power with the content people like Disney, Viacom, and Fox. TWC does the content buying for BHN, using its 2 million plus subscribers for added leverage. That goes away with the Comcast-TWC deal. And Comcast did not really address that in its filings. Hence, the Comcast deal.
AT&T U-Verse and VZ FiOS TV have less than 6 million TV subs. CenturyLink and Frontier have less than BHN. The buying power would be skewed too large I think. Even if AT&T gets to buy DTV, it would reach 26M subs – about the size of Comcast now. Comcast also owns NBCU – a large content provider.
“The Newhouse family has evidently seen the writing on the wall, hiring Wall Street investment bank UBS to advise whether it makes sense to sell. If Bright House does decide to hang out a “for sale” sign, Time Warner Cable has the right to bid first.” [source] The Newhouse family also owns a lot of magazine and newspaper interests. “Advance Publications, Inc., is a privately held communications company that, directly or through subsidiaries, owns Condé Nast Publications, American City Business Journals, the Golf Digest Companies, and newspapers in more than twenty-five American cities.”
“Advance serves as the holding company for the family’s 31% stake in cable entertainment company Discovery Communications.” [wiki] What a mix of ownership, like a small Time-Warner.
I feel sorry for the employees of Comcast, TWC, Charter, BHN and DTV – job uncertainty! Ugh!
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