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Comcast will announce later this morning it has reached an agreement to acquire all of Time Warner Cable in an all-stock deal worth $44 billion.
If approved by regulators, Comcast will dramatically increase its size as the nation’s largest cable operator with over 33 million subscribers — vastly outnumbering every other cable company in the country. It also likely means Time Warner Cable broadband subscribers will eventually be subject to Comcast’s usage caps and overlimit fees, now being market tested around the country.
The offer of $159 a share for Time Warner Cable stock – $1 less than what TWC CEO Rob Marcus demanded for a buyout – is far higher than the $133 a share in cash and stock offered earlier by Charter Communications.
Tonight’s revelation that Time Warner Cable and Comcast reached a deal, first reported by CNBC, likely caught Charter by surprise. Charter had tried to acquire Time Warner Cable for months, going as far as nominating candidates for TWC’s board of directors that could have influenced a sale of the company. At the same time, Charter thought it was negotiating a friendly deal with Comcast to divide Time Warner Cable territories between the two companies.
Time Warner Cable management offered no clues they were negotiating with Comcast and delivered a presentation to shareholders last week promising major upgrades for Time Warner customers and future success as a standalone cable operator. All of those plans are now in doubt.
Comcast and Time Warner Cable reportedly believe the deal will quickly pass any antitrust review before the end of the year because neither company competes in the same markets, but Comcast will offer to divest a token three million subscribers from the combined company, according to sources.
The FCC formerly limited cable companies from owning or controlling more than 30% of the cable industry, but Comcast successfully sued to have that ownership cap overturned. A belief the deal would present looming antitrust problems could be grounds for the U.S. Department of Justice to oppose the deal, likely terminating it.
Consumer groups hope the deal gets derailed as soon as possible.
“In an already uncompetitive market with high prices that keep going up and up, a merger of the two biggest cable companies should be unthinkable,” said Free Press president Craig Aaron. “This deal would be a disaster for consumers and must be stopped. No one woke up this morning wishing their cable company was bigger or had more control over what they could watch or download. But that — along with higher bills — is the reality they’ll face tomorrow unless the Department of Justice and the FCC do their jobs and block this merger. Stopping this kind of deal is exactly why we have antitrust laws.”
Time Warner is already way overpriced in my area and really the only realistic internet provider in my area. I have a feeling this merger is not gonna help my cause.
Google Fiber isn’t coming a moment too soon for us lucky folks in Austin.
Time Warner Cable has the best internet service in my area but as soon as they place a data cap, it’ll be useless.
This is TERRIBLE news! This article is the first thing I’ve read since waking up and it has ruined my day.
I am fortunate to be in Austin, TX. However, Google Fiber will not be available city wide for years. Ugh!
On the bright side, hopefully Comcast will eliminate data caps nationwide to get through the anti-trust investigation.
Earthlink is still an option in Austin for the time being. Eventually, they’re likely to be subjected to the same caps as TWC customers will be (they’re essentially TWC resellers, thanks to a previous TWC deal with the city) but you can get a better deal at the moment by switching to them.
As much as I despise TWC and having no other choice for a provider the last 15 years this would be even worse. The solution is more competition not less.
Jerome: how does changing the name of your ISP from “TWC” to “Comcast” lessen the amount of competition you have available?
It wouldn’t change my choices but would reduce competition on a larger scale allowing for more monopolizing with inflated rates for consumers. While my choices may not change from a numerical standpoint for my area the likelihood of a result with being charged more for the same or less service is highly probable.
I’m not one of those that is lucky enough to live in either Austin or one of the areas that has low priced gig service for residential users and businesses. I live in Los Angeles Ca. Our service with Time Warner here in my city will go from not so bad and actually stable meh upload speeds not withstanding, to almost unusable and overly expensive. I hope the FCC and DOJ do the right thing as they did with the AT&T TMobile merger a few years ago and either block the sale or force Comcast to completely stop capping all… Read more »
Allowing Comcast to merge with the promise of no internet usage caps is still not a win-win for the consumer. Their massive infrastructure footprint would enable Comcast to leverage against anyone using their private network including businesses and individuals, especially without hard net neutrality laws in place. The DOJ and FCC need to stop this deal in it’s tracks. There is no evidence this will be pro-customer and less competition means higher prices.
Charter would have been far worse.
How about they have to split the companies into two parts? The wired part which can sell to anyone and the video service part? Then we can get some real competition… Instead of the oligopoly situation we have now.
Where’s the contact info for our senators/FCC/etc to call and tell them to nuke this awful deal? I will be on the phone immediately, this cannot be allowed to happen!
It will be up in due course. We’re lining up a strategy.
Comcast has 44 billion to buy TWC but we’re told corporate taxes are too high
https://petitions.whitehouse.gov/petition/stop-comcasttimewarner-cable-merger-and-require-more-competition-cable-industry/ym52vbd4
HORRIBLE news! I thought my area would be saved by Google Fiber, but they apparently can’t be bothered to offer to all of the KC area. So I’m stuck with these options:
TW – worst tv service and second worst ISP
Comcast – worst ISP and second worst tv service or
ATT – 4th worst ISP
http://www.businessinsider.com/companies-with-worst-customer-service-2013-5?op=1
Phil – Stop the Cap got a mention in a couple of comments on this Guardian report. http://www.theguardian.com/media/2014/feb/13/comcast-time-warner-cable-takeover-throttle-internet Enough is enough! Instead of allowing this anti-competitive merger, those who supposedly represent us in Washington should advance the public, not the corporate, interest. For starters, the ownership of all cable/broadband infrastructure should be divorced from that of the content provider. It should be regulated as a public utility and compelled to open its service to multiple content providers. Local governments should be allowed the option to bring the infrastructure under public ownership. The present local monopoly setup is the worst of… Read more »
Well…living in Rochester, NY..There is slim pickings for Internet…TWC’s Roadrunner or Frontiers DSL. They both suck. But now that I know Comcast is taking over…I am Protesting and Going with the company that Doesn’t Cap. Frontier. Google SAVE US
Will Greenlight Fiber ever be a real ISP option for us in Rochester NY?