Comcast Says Time Warner Merger Will Mean Faster Internet

The top two U.S. cable service providers, Comcast and Time Warner Cable, announced on Thursday a merger (or friendly takeover) worth $45.2 billion. The agreement will be a stock-for-stock transaction, with Comcast acquiring 100 percent of Time Warner Cable's 284.9 million shares outstanding for shares of Comcast. Time Warner Cable shareholders will thus own 23 percent of Comcast's common stock.

"The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders," said Brian L. Roberts, Chairman and Chief Executive Officer, Comcast Corporation. "In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders."

Reuters reports that the Comcast-Time Warner Cable deal may face "close scrutiny" from U.S. antitrust regulators because of the deal's potential to reshape the country's broadband and pay TV markets. The resulting company stemming from this deal would have a footprint stretching from New York City to Los Angeles. The company would also be in 19 of the 20 largest U.S. TV markets.

Time Warner Cable owns cable systems located in key areas including New York City, Southern California, Texas, the Carolinas, Ohio, and Wisconsin. Through the merger, Comcast will acquire approximately 11 million managed subscribers, but will divest 3 million, leaving 8 million. Between the two, the new company will have around 30 million subscribers, which is just under 30 percent of the U.S. pay television market.

What does this deal mean for subscribers? Comcast argues that customers will benefit from "technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi." For businesses, the new company will be able to offer advanced services like "high-performance point-to-point and multi-point Ethernet services and cloud-based managed services to enterprises."

For now, the merger is expected to close by the end of the year. It is subject to shareholder approval at both companies and regulatory review and other customary conditions.

"I don't know if the deal is too big to fail to be approved, but it is definitely too big to sail through either the Department of Justice or the FCC without serious, serious examination," said former FCC Chairman Reed Hundt in speaking with Reuters. "Only Comcast could have paid this price and the combined company, if approved, would tilt the balance of power at every negotiating table in media and content and broadband and equipment industries."

Comcast helped reshape the U.S. media landscape back in January 2013 with the acquisition of NBCUniversal, taking a 51 percent stake in the media company from General Electric. Regulators approved the deal but with several conditions, one of which was that Comcast relinquish management rights of its minority stake in Hulu. Comcast now owns 100 percent of the company.

NBCUniversal LLC is the byproduct of that specific acquisition, which handles the NBC broadcast stations, the cable channels (USA, E!, SyFy and more), the Universal movie studio, and all the related theme parks.

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  • vmem
    now I don't know if you've thought this through Comcast, but I'm not sure what I can do with 'faster internet' under the tyranny f your data caps... Perhaps you're trying to make me hit the cap faster so I'll cough up more dough?
  • game junky
    As an IT manager for a company who has a cable/DSL connection at over 250 locations, this is good news. A large portion of our connectivity comes from TWC & Comcase so the concept of high speed options in our larger metropolitan sites is good for our customers and our bottom line. Now they just have to buy up Cox and they're ready to rumble...
  • zfreak280
    Not just no, but HELL NO. It's bad enough having to pay per GB with these clowns, but they are doing everything in their power to smash out the competition and make the consumer pay MORE for the same service that the competition offers. I hope, no I pray that the FCC shuts this deal down.