Comcast set to acquire Time Warner Cable for $45 billion
Comcast announced Thursday its plans to acquire Time Warner Cable in a $45.2 billion deal that would merge the top two U.S. cable operators.
Heading off monopoly concerns, Brian Roberts, chief executive of Comcast, said Thursday morning that the transaction was “approvable.” Anticipating a lengthy review from federal antitrust regulators, Roberts said the company will drop three million subscribers from its combined total of 33 million cable subscribers to keep its share of the market below 30 percent. Roberts added that the resulting “synergies” from the deal would save the company $1.5 billion in operational costs. He also remained confident that the deal will be closed within the year.
The Federal Communications Commission would also need to determine whether the consolidation would be in the public’s interest.
Roberts addressed those concerns, saying that the merger was “pro-consumer” and “pro-competitive.” The press release promised a “superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi” for consumers.
But, as Quartz points out, Comcast and Time Warner Cable rank last in customer satisfaction within the cable television industry. Consumers have seen subscription fees climb and abrupt drops of programming due to the industry’s fights with content providers.
Comcast and Time Warner Cable don’t compete for pay-TV customers, a detail that would be in the merger’s favor in the antitrust review.
There’s been a steady decline of cable television subscribers as more people turn to broadband alternatives such as Netflix, who has 31 million subscribers, and Amazon for content. Regulators will also look into how this merger would affect these high-bandwidth services that also include Hulu and YouTube.