Patrick Drahi, Altice, and his friends at Goldman Sachs are depicted as working together to make Altice’s acquisition dreams come true.

Patrick Drahi rarely gives up on his dreams. His latest is to be America’s biggest cable magnate, and there are signs he is laying the groundwork to make that dream come true.

CNBC and some French media outlets report Drahi’s Altice NV and Altice USA are assembling their European and North American financiers, attorneys, and dealmakers to potentially make an offer to acquire Charter Communications. If successful, Altice would leapfrog to the largest cable operator in the United States after combining its Cablevision and Suddenlink systems with Charter’s own legacy systems and those it acquired from Time Warner Cable and Bright House Networks.

Any succcessful deal would likely require an offer of $500 a share for Charter stock, which would make the company worth about $200 billion. Because Altice is dwarfed by Charter, it is unlikely Drahi will be able to raise enough cash on his own to make a deal, and Altice is already mired in debt from its ongoing aggressive acquisitions. Drahi’s biggest competitor for Charter is expected to be Japan’s SoftBank, which has shown an interest in acquiring the cable operator to combine with its wireless carrier Sprint.

Altice isn’t likely to encounter the regulatory hurdles that have caused other colossal cable deals like Comcast’s attempt to buy Time Warner Cable to collapse over regulator opposition.  Drahi’s involvement in U.S. cable has been limited to acquisitions of two smaller players – Cablevision and Suddenlink.

Drahi’s strongest arguments to sell investors on the deal are likely to surround his well-known obsession with draconian cost-cutting at his acquired companies. Drahi would certainly offer investors billions in deal synergies and savings, accomplished through dramatic layoffs, scrutinizing costs right down to replacement coffee makers for the break room and copy paper for the office, and sweeping cutbacks on employee and vendor perks. Drahi has also taken a strong stand against Hollywood studios and cable programmers that seek double-digit rate increases for cable programming. In Europe, Drahi is known for terminating costly contracts with programmers and launching alternative channels Altice owns and operates to replace them.

Drahi is also likely to sell regulators on his current plans to transform cable in the United States away from coaxial cable and towards fiber optics straight through to the home. Drahi has already offered to wire all of France with fiber optics and is presently embarking on a fiber upgrade for his Cablevision systems in New Jersey, New York, and Connecticut. But Drahi’s ambitious fiber plans have been met with suspicion in France where some believe Drahi is all talk and no spending.

He has promised the Macron government he will spend $17.6 billion on building an Altice-owned fiber broadband network in France by 2025 without any taxpayer subsidies. While that sounds laudable, it would mean Altice’s SFR would pull out of the government’s national fiber strategy that depends on different telecom companies building out fiber in different regions of the country.

Drahi is threatening to become a spoiler because before he acquired SFR, the former management cut a deal with Orange – France’s largest telecom company, to jointly build a fiber network for 14 million French households in smaller towns and suburbs. Orange would build and own 80% of the territory, SFR 20%. But because SFR needs access to that fiber network for its own wired and wireless broadband and television services, it will have to pay rental fees to Orange to use the network in most of the territory. Drahi instead wants a 50-50 ownership split to cut costs and Orange has said no. Altice’s plans for its own alternative fiber network would allow it to bypass the Orange-owned network and deliver traffic over its own fiber system. That could mean parts of less-populated France will have two fiber networks to choose from instead of just one.

Drahi

It is an expensive gamble, but investors seem largely unfazed so far, perhaps suspecting Drahi has no intention of actually following through on spending billions on a potentially redundant fiber network in the suburbs and farm country, preferring to believe the threat of doing so will drive Orange back to the negotiating table.

Some American analysts are uncertain whether Drahi can pull off an acquisition deal that would combine Charter, a company many times larger than Altice, with Altice’s much smaller earlier cable acquisitions. Some also suspect he won’t find enough money to attract interest from Charter’s biggest shareholder — John Malone’s Liberty Media and Charter’s current CEO Thomas Rutledge.

But French media has little doubt Drahi can pull it off, especially when he is motivated.

“Patrick Drahi, founder of Altice, has set his limits: he has none,” notes Le Figaro, adding Drahi is a classic industry spoiler, completely happy to blow up cable’s comfortable status quo, even when at risk of attracting the wrath of his competitors.

CNBC reports Altice is preparing a serious offer to acquire Charter Communications. (5:54)

After losing another 90,000 residential cable television customers during the second quarter, Charter Communications is beefing up its customer promotions to win back customers and respond to competing offers.

Starting this month, Spectrum is pitching a double play bundle for new customers using its familiar formula of $29.99 for each service, only this time they actually came close to meaning it.

Customers who want a 60Mbps (100Mbps in some markets) broadband package with Spectrum Select TV package can now get each service for around $30 a month, but will still have to pay around $6 for a ‘required’ cable box and another $7.50 a month for Spectrum’s Broadcast TV surcharge. To sweeten the deal, Spectrum is including a free year of Showtime.

Prior to this promotion, Spectrum’s double play promotion charged $59.99 for the TV bundle and $29.99 for internet access, one penny more a month than its triple play bundle which also includes a phone line.

The newest double play promotion offers about $24 in savings a month over the old one, which usually included one set-top box for free.

The double play promotion, which omits a phone line, is likely to continue a decline of Charter’s residential home phone customers, many canceling landline service as their aggressively priced Time Warner Cable phone promotion expires. Charter’s broadband growth has slowed as well. The company added 231,000 customers during the quarter compared with 308,000 during the same quarter last year. Charter’s pricing and promotions proved not as attractive as some of their competitors.

Regular speed test results from a network of volunteers using FCC-supplied equipment are showing some problems with Charter Communications’ ability to meet its advertising claims for fast broadband speeds.

After Charter acquired Time Warner Cable in May 2016, it formally suspended Time Warner Cable’s Maxx upgrade program, designed to increase broadband speed and capacity across the cable company’s footprint. Charter committed to completing Maxx upgrades already underway at the time the merger was concluded, but future upgrade activity would have to wait for up to three years before being completed.

As a result, newly available speed test results are showing that in some areas where Charter delayed upgrades, some customers are seeing their speeds gradually drop as capacity no longer adequately meets demand.

One sign of trouble is when broadband speeds begin to slow or become unstable during peak usage times, typically in the evening hours. This is usually a sign customers have saturated the shared neighborhood connection serving their area. When customers head for bed, speeds usually return to normal. But customers are also complaining that in some instances they never get the speeds advertised by Charter’s Spectrum. Sometimes this is a result of a local line problem, but in some neighborhoods, a large number of customers sharing an inadequate or faulty connection can cause speed slowdowns that persist day and night.

A closer examination of daily speed test results over the last year show that while ordinary speed tests using Charter-hosted speed test servers or websites don’t always show a problem, independent tests of network traffic performance in areas bypassed for upgrades are showing signs of traffic jams.

During the last quarter of daily periodic testing, a customer that used to subscribe to Time Warner Cable’s 50/5Mbps service and routinely got those speeds no longer does after switching to Charter/Spectrum’s 60Mbps plan. Customers question where the bottleneck is, because when they test broadband speeds using the company’s own test tools, they usually find their broadband speeds are above what is advertised. But independent, regularly conducted speed tests by third-party organizations reveal problems. One customer noted for the month of July, he received a minimum of 27.3Mbps, a maximum of 70.1Mbps, but an average of only 47.6Mbps from Spectrum’s basic 60Mbps plan — less than what he was able to get from Time Warner Cable’s 50Mbps Ultimate Internet.

A review of traffic graphs show most of the problems are showing up in the evening starting by 5pm weekdays. Tests show uneven performance until around midnight.

Masayoshi Son, chairman of SoftBank Group

Charter Communications is a prime target for a takeover by Japanese giant SoftBank Group Corp., and chairman Masayoshi Son appears not to be willing to take no for an answer.

Last week, Charter executives rejected a bid by Son to combine Spectrum with Sprint, the nation’s number four wireless carrier controlled by SoftBank. Now Son is attempting to put together an offer Charter’s shareholders can’t refuse.

Son could make an announcement as early as this week, according to Bloomberg News.

SoftBank would be acquiring America’s second largest cable operator estimated to have a market value of $101 billion. SoftBank itself is worth approximately $89 billion. The Japanese conglomerate already carries $135 billion in debt, the second most indebted non-financial company in Japan, outdone only by Toyota.

For most Charter customers, a merger would make the second transition in two years, after Charter acquired Time Warner Cable and Bright House Networks.

Son originally planned to combine Charter and Sprint into a new public company. Something similar would likely happen if SoftBank attempts a direct takeover of Charter Communications. Son’s investment in Sprint has not paid off. The wireless carrier has lost billions since SoftBank took control of Sprint in 2013.

“We understand why a deal is attractive for SoftBank, but Charter has no interest in acquiring Sprint,” Charter said in a statement over the weekend before Bloomberg reported Son’s latest plans. “We have a very good MVNO relationship with Verizon and intend to launch wireless services to cable customers next year.”

But Charter’s largest shareholder, Liberty Broadband Corp., controlled by Dr. John Malone, is interested in a deal bringing Charter together with a wireless carrier. But there is no word if Malone approves of a tie-up with Charter and SoftBank.

“Overall our view is that Charter likely does not want to sell, but that SoftBank is one of the few companies that could put a bid in big enough to take control,” analysts at JPMorgan Chase & Co., led by Philip Cusick, said in a note. “While we don’t see a deal as very likely, especially given later headlines that Charter is cool to the idea, Masa is never to be counted out as a buyer.”

Son’s urgency to do a deal may be related to Sprint’s ongoing losses and the bonds used to finance that acquisition near maturity.

Spectrum customers will be paying more for their cable TV and broadband service starting in August, according to notifications now starting to appear on customers’ bills around the country.

Important Billing Update. At Spectrum, we continue to enhance our services, offer more of the best entertainment choices and deliver the best value. We are committed to offering you products and services we are sure you will enjoy.

Effective with your next billing statement, pricing will be adjusted for:

• Broadcast TV Surcharge from [generally between $4-6] to $7.50. This reflects costs incurred from local Broadcast TV stations.

• Spectrum Receivers from $4.99 to $5.99 (per receiver).

• Internet Services from $53.99 to $54.99 (for standard 60 or 100Mbps service, depending on area, per modem and bundled with cable TV).

The average customer will see a rate hike of about $4-5 a month as a result. Customers on promotional Spectrum plans may not see a rate change immediately, but all cable TV customers will be subject to the Broadcast TV surcharge, because it is not a part of a promotional package.

Charter traditionally reviews its rates twice a year.

Charter Communications has also updated its Privacy Policy, which takes effect on Aug. 1, 2017. Customers can opt out of targeted emails, targeted marketing campaigns, and targeted TV ad inserts sent to your cable boxes.