Pedestrians walk past the Time Warner center in New York City.
Pedestrians walk past the Time Warner center in New York City. - 
Listen To The Story
Marketplace

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.

As a nonprofit news organization, Marketplace is on a mission that drives what we do every day: to increase economic intelligence across the country. But we can’t do it alone. Become a Marketplace Investor today, in whatever amount you choose, and your donation will go twice as far, thanks to a dollar-for-dollar match from The Kendeda Fund.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.

Follow Tim Fitzsimons at @@tfitzsimons