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Mass. Charter Customers Could Soon Head to Comcast

comcastcharter

PHILADELPHIA (WGGB/AP) — Charter customers in western Massachusetts could soon have a new cable provider.

As part of Comcast’s efforts to acquire Time Warner Cable, Comcast says that they will sell 1.4 million subscribers for $7.3 billion in cash, and spin-off another 2.5 million subscribers into a company that in which Charter will have a one-third stake.

Comcast and Charter are also expected to exchange about 1.6 million subscribers in various parts of the country.

That swap would impact Western Massachusetts Charter customers.

Alex Dudley, Charter’s senior vice president of Communications, tells ABC40 that under the plan, Charter customers all across Massachusetts would be switched over and become customers of Comcast.

Dudley notes that any changes are still pending final approval as the Comcast/Time Warner transaction is still under regulatory review.

The deal is part of Comcast Corp.’s commitment to federal regulators to shed at least 3 million subscribers and serve no more than 30 percent of all the pay TV customers in the U.S. The company hopes the divestiture will help its $45.2 billion acquisition of No. 2-ranked Time Warner Cable gain approval from federal regulators by the end of the year.

Brian Roberts, Comcast’s CEO, told investors on a conference call that service areas in clusters help to save costs and make the company’s offerings more competitive. A combined Comcast-Time Warner Cable would service roughly 30 million video customers and 28 million Internet subscribers.

The reshuffling amounts to a hefty consolation prize for Charter, which lost the bidding war for Time Warner Cable Inc. when the Comcast deal was announced in February.

Charter CEO Tom Rutledge told investors the transaction will create a “highly efficient footprint for us in the Midwest and Southeast.”

“Today’s announcement represents a very good outcome for Charter,” he said.

Consumer groups criticized the latest dealings.

Matt Wood, policy director for media consumer advocacy group, Free Press, said the deal does nothing to address the problem that cable companies intentionally don’t compete in each other’s service areas. That leads to higher prices and worse customer service, he argued.

“It doesn’t do enough to address the harms of having even fewer companies,” he said.

Charter will form a new holding company that will own 33 percent of the Comcast spinoff, while shareholders of Comcast and the former Time Warner Cable will own the remaining 67 percent of the new company.

The spinoff will take on about $9 billion in debt, reducing the same amount from Comcast’s books. Combined with $5 billion in the after-tax proceeds from Comcast’s sale of subscribers and the equity stake in the spinoff, Comcast estimates the deal will create about $19.5 billion in value for its investors.

Charter said the acquisition of subscribers will boost its residential and commercial video customer base to about 5.7 million from 4.4 million. It is also entering into a management deal with the spinoff company, giving it management of about 8.2 million subscribers, nearly doubling its current size and making it the second-largest cable operator in the country.

Vijay Jayant, an analyst with ISI Group, said Monday’s deal is neutral for Comcast but positive for Charter.

The deal will boost Charter’s earnings per share because it values the newly acquired subscribers at 7.125 times their profitability, which is cheaper than the 8-9 times that Charter’s stock was trading before the deal was announced, he said.

The deal is also strategic for Charter because it is acquiring subscribers in areas where there is less competition from fiber-optic lines built by telecoms companies like AT&T and Verizon, he said. For Comcast meanwhile, “it fortifies their big market concentration.”

He said the asset sale will help Comcast convince the government to approve its Time Warner Cable merger, which he thinks is highly likely to go through.

Comcast said that the new cable provider it is spinning off will have a nine-member board. That will include six independent directors and three appointed by Charter. Comcast itself will have no ownership stake in the spun off company and will have no role in managing it.

Both Comcast and Charter’s boards have approved the transactions, which are subject to Comcast’s deal with Time Warner Cable closing, approval by Charter shareholders and other conditions. Time Warner Cable’s board has also signed off on the deal.

Comcast still anticipates its combination with Time Warner Cable will result in $1.5 billion in operating savings annually.

Information from Ryan Nakashima of the Associated Press was used in this report.

WGGB encourages readers to share their thoughts and engage in healthy dialogue about the issues. Comments containing personal attacks, profanity, offensive language or advertising will be removed. Please use the report comment function for any posts you feel should be reviewed. Thank you.

  • John Winston

    This is a great move for all charter customers. It can’t happen soon enough.

    • john

      Let me know how you feel about that when your price stays the same but you get half your internet speed and they limit your channels. Because they want to split it into more packages.

  • Tanya Marlow

    In plain language, what’s in it for the consumer? Will costs to us go down?

    • j,k

      No costs will go up, but service, reliability, quality of your picture, and customer service will go down.

  • mother person

    I highly doubt costs will go down as Comcast will be the only cable provider in the area, there should be competing cable companies because when there is only one there is no incentive to have competitive pricing and excellent customer service or the customer will go to another provider, Comcast has been proving this for years. This is why I have Direct TV even though the internet is a poorer quality than xfinity, the customer service is OUTSTANDING and the pricing is a bit lower but not enough for it to be a factor. I also blame the city and their contract with Comcast for keeping competitors out, I wonder how much Springfield makes to screw over the voters who elected them. Just another example of big corporations are lining the pockets of our elected officials while the little foots the bill. Again. Thanks!

  • John

    Will this allow people in Warren to watch Channel 40, again? So many of the people in town would like for this to happen. We are “forced” to watch Boston stations that have no interest in our local area.

    • john

      pretty sure FCC mandates that so Comcast wont do it either.

  • cx cx

    How can you people be so gullible? Comcast is the very WORST EVER provider in America, while Charter is TOPS in every way. Merging the best and the worse, this should be interesting.

  • john

    Thank god…Charter services suck. They have the worst cable I have ever had and unlike what the commercial says they do not have the most reliable network. I cant wait

    • john

      Charter has the most reliable network because they have redundancies in place to keep services up. Just because your inside coaxial isn’t up to par you shouldn’t blame the cable company. Thats like buying a brand new Samsung refrigerator but not having the proper voltage in your kitchen and telling everyone Samsung sucks as an appliance.

      • john

        It has nothing to do with my end and charter even admitted that dumb ass

        • john

          You make no sense kid…. Even if it isn’t you inside coaxial than it would be outside coaxial…. COMCAST WILL BE USING THE SAME SHIT…. Are you to dense to understand that……. Only difference is comcast isn’t going to care and charge you for every visit…

          • john

            Apparently the dense one is you so listen carefully and maybe at the end of this comment you might understand…the issue is with their hd receiver. Charter has already said its a known issue with their receivers of which they have no resolution for. The problem has nothing to do with coax cable inside or outside and it is their problem. They also said they cant switch out the box because the problem will still exist because it is a software/programming issue that exists within all of their hd receivers. Im pretty sure that you should be able to follow me now seeing I put it into simple terms for you.

          • john

            And than let me break this down for you. There isn’t any software issues with hd boxes. So you are full of crap… There is a software problem with hd dvr and isn’t a widespread issue… Probably a Cisco 8640 box.. Which occasionally has problems with the hard drive.and yes if you switch it out it will be fine….

          • john

            Well then if that were true then that means charter is a bunch of liars because they are the ones that told me that. But I do believe them. Why you ask? Because their services and equipment do suck and you dont know what you are talking about

          • john

            Um I am a charter tech and have been for 5 years………

          • john

            Point proven!!! Thanks for helping me prove my point. I do have to go now as I am throwing a welcoming party for comcast and damn theres a lot of people here waiting to shove their boot up charters ass!!!

    • dffd

      They just won an award for the top cable provider of the year. You are an idiot John.

      • john

        What are you talking about I am saying charter is awesome… Make your point more clear kid.

      • john

        I believe you are the idiot because you believe the bs you post

  • john

    You’re crazy how does Charter have the worst cable? On top of that Comcast will be working with the same exact lines that Charter has. So how do you think that cable will be better?? Just because it has Comcast’s name? Are you really that naive? On top of that Comcast will be using the same employee’s also… So what exactly changes for you? Oh wait, that’s right the fact that Comcast will have everything in Ct except a couple towns. Channel 40??? yea right you will get that for just an extra 20$ subscription fee for “Premium” Channels from New York instead of Massachusetts? SMH

    • ;l/;l’

      Charter just won an award for the top cable company in America for service, reliability, and continuing upgrades. So these imbeciles can talk out the sides of their mouths, but when you see that satellite dish (whose numbers just overtook cable companies in this are for the first time) put up on their roof, you’ll know the truth. That is Comcast is a joke, and one of the lowest rated cable companies around.

      • fghfghg

        Every word you say is true. These people standing up for the worst cable company around are the same ones who never had any other provider and have no experience to speak of. Charter is, or should I say formerly was, the best cable company in America. OTOH Comcast just lost more subscribers to satellite, and satellite has just overtaken the number of customers in the westfield/west springfield area, right in Comcasts own backyard. So they are satellite TV’s best friends. The more Comcast in the area, the more satellite becomes popular. Nuff said?

    • Very Wise Man indeed.

      Are you really so stupid to think the exact same lines have anything to do with it? It’s what’s ON THE ENDS OF THOSE LINES that makes the difference, not the wire it’s run on. God how can you be so stupid????

      • john

        Are you serious???? Do you even know how cable is ran??? Or how it works with RF…. The lines are what cause outages for the most part….and are you so stupid to think that Comcast isn’t going to use the same headends the same nodes the same lqa???? You’re ignorant.

        • john

          Thats funny because charter even afmitted the problem is with their equipment and its a known issue that they are trying to fix but are not having any luck doing so and the issue has been ongoing for a while with no resolution

  • john

    Ive had both companies and charter sucks. I have more problems with their cable box shutting off and their modems failing but yet never had those issues with comcast. Again charter is garbage and I cant wait to be rid of their crappy junk.

    • sdftgf

      Really John? Tell us about your first bill from Comcast for over $300? Installation charges that they say they waived, line fees, installation fees, and 3 months of a bill in your first month. C’mon John, tell us about that? How much was it? This company has more complaints than any other cable company in America, and you idiots are GLAD to see it coming here????

      • john

        I never had a bill for more than what was owed. Anytime I did have a bill that had any error that I was questioning, I called them and they took care of it immediately. They are one of if not the largest cable services provider in the country so its understandable that their #’s of possible complaints would be higher. Also dont call people idiots that you dont know

        • ed

          Total lies. They bill a month ahead, so your 1str bill was 2 months, one of which you did not yet owe. Next you admit having billing issues, or you wouldn’t have to have called them at all. Comcast never fixed any billing issue for anyone, pay it or you get shut off. Your 1st bill is installation, wiring, installing sockets (needed or not) plus 3 months bill because it takes the idiots more than a month to print a bill. You simply bolster my case with your own posts.
          Yes John the idiot, Comcast is for you.

          • ghfgf

            Hey John, how about that nice circa 1980′s cable box they give you? Used, scratched, dented and broken, but that’s all you get from Comcast, USED JUNK THAT CHARTER DUMPED 10 YEARS AGO FOR BETTER EQUIPMENT. Half of them are sop scratched up you can’t read the numbers.
            Honestly John, I can fit what you know about cable companies in a thimble. You are either very ignorant (even backing up my claims in your own posts) or very stupid.There are billing issues all the time with Comcast, and you just admitted it.

          • john

            ive never ever received a bill for two months. Your so full of shit. Your just mad at comcast because you didnt pay your bill like a deadbeat and they shut you off loser

      • cvfdf

        Notice he won’t answer the question of his first bill? How about others joining in about their first bills from Comcast?

    • dvcds

      Funny but in 5 years of Charter I never had my box go out once except during the tornado. Don’t blame charter because you have crappy wiring in your house, or a short.

      • john

        Not my wiring, even charter admitted it was their equipment with a known issue and they have no resolution to the problem. Ive never had a bill from comcast for $300 dollars

    • dvcds

      Crappy junk? You are trading in brand new equipment from Charter, for a 1990′s used, scratched, dented, and barely working filthy POS. I saw a cockroach run out of one of their used boxes. Brand new, to used outdated junk. Good luck pal.

  • comcastsux

    It’s pretty easy to see who the plants are, and the vegetative matter clogging their heads up. I have had either Charter or Comcast my whole life, in a couple different cities and towns. Without a doubt, Charter is 100x superior over Comcast. Some people may have an occasional issue, but for every person with a problem there are 10,000 who have never had any, and only one outage during the tornado. I can tell you now that lie about the box cutting out bis crap. They would replace the box right away, not keep playing games with it. But his lie makes a better “planted” version.