Charter Communication and Time Warner Cable announced today that the two cable providers plan to merge in a $55 billion deal that values Time Warner Cable at nearly $79 billion.
Charter is also buying a smaller provider, Bright House Networks, which has 2.5 million customers. The three companies combined under the Charter banner will have roughly 24 million customers — just under the 27 million customers of rival Comcast.
Ross Rubin, principal analyst at Reticle Research, says a larger Charter “can negotiate more favorable terms with broadcasters,” possibly creating savings.
“They’re going to argue this is really great for consumers,” says Rob Frieden, a professor of telecommunications and law at Penn State University. But, Frieden predicts that the new competitive landscape would stymie a possible “maverick” company from emerging.
“You also have a situation where two operators control 80 percent of the broadband marketplace,” he says.
The deal may go more smoothly than the failed Comcast-Time Warner Cable merger, partly because Charter could now serve as a competitive check to Comcast.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?