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Policy

9:30pm April 29, 2014

Comcast Divests 3.9 Million Customers to Charter Communications, SpinCo

In anticipation of its proposed merger with Time Warner Cable, Comcast Corporation has developed a three-pronged approach to divesting 3.9 million customers to Charter Communications and a new cable venture, SpinCo.  The divestiture will ensure that post-transaction, Comcast will retain less than 30% of the total residential video subscriber base in the U.S. – a critical point for those concerned that a merger between Time Warner Cable and Comcast would result in too much market concentration held by one company.

Called an important step in Comcast’s merger with Time Warner Cable, divestiture supports the company’s goal of making this a “pro-consumer and pro-competitive” transaction.  In addition to enabling Charter Communications to become the second largest cable company in the nation by assuming 1.4 million former Time Warner Cable customers, as part of the divestiture Comcast  will help create a new, independent, publicly-traded cable operator, SpinCo, to manage 2.5 million former Comcast customers.

Subject to several conditions and Hart-Scott-Rodino and Federal Communications Commission regulatory approvals, it is thought that this divestiture will make the merger of Comcast and Time Warner Cable more appealing.  It also assuages any lingering discontent Charter may have felt having lost to Comcast in its own effort to purchase Time Warner Cable.

Charter will gain customers in Ohio, Kentucky, Wisconsin, Indiana andAlabama, while divesting them in California, New England, Tennessee, Georgia, North Carolina, Texas, Oregon, Washington and Virginia. SpinCo will own cable systems that are near Charter’s existing footprint in Michigan, Minnesota, Indiana, Alabama, Tennessee, Kentucky and Wisconsin.

Announced on April 28th, support for the divesture is expected to start rolling in in the days ahead and policymakers and consumers, alike, gather additional information and better understand the benefits this proposed transaction will provide to consumers by way of greater technological opportunities, programming efficiencies, and streamlined customer service operations.



About the Author

Malik Shareef
Malik Shareef, Esq. is a senior sports writer with Politic365. A graduate of the University of Virginia and Washington and Lee School of Law, he now practices law in the Washington, DC area and is a certified contract advisor for the NFL. Malik's experience as a sports agent and attorney give him a unique perspective on law-related issues in sports and entertainment. Follow him on Twitter @malikshareef.




 
 

 
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3 Comments


  1. Edgar Burroughs

    SpinCo–it’s a perfect name. It’s ALL spin. This is a shill piece for Comcast written by “the senior sports writer.” It looks like a press release from Comcast. The entire Charter/Comcast activity is being done to project an air of inevitability and a “done deal” image to the public.

    This merger is a terrible idea. Bad for consumers, Bad for technology, Bad for America, good for Comcast. We cannot let this happen.


  2. Lynn

    Just because a transaction has business benefits doesn’t mean consumers won’t see an upside as well. It’s so sad when people are suspect of any transaction that reflects changes in the current communications landscape.



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