A new cable mega-deal for Charter and Time Warner

by Steve Blum • , , ,

I said I’d pull myself back together.

Now it’s Charter Communications’ turn to try to buy Time Warner Cable. The latest mega deal would have Charter hanging onto its deal to buy Bright House, and paying $57 billion for Time Warner’s cable systems and 15 million subscribers. If successful, it would make Charter the second largest cable company in the U.S. and the largest in California.

Federal Communications Commission chairman and lobbyist-in-chief Tom Wheeler wasted no time in reassuring the world that this latest deal won’t necessarily meet the fate of the Comcast-Time Warner-Charter mega-deal that was killed by federal regulators…

The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The Commission will look to see how American consumers would benefit if the deal were to be approved.

Combining Charter, Time Warner and Bright House will create another giant cable company. From a federal perspective, it might not look too much different than the rejected Comcast deal. The end result of that one would have been a bigger Comcast, but also a more tightly consolidated Charter. And a much bigger one, if you count the cable systems that would have gone to a new company that would have been, to a significant degree, under Charter’s control. Either way, Time Warner is gone and the net result is two giant cable companies – Comcast and Charter – where there used to be three.

There’s still a chance that Altice – the european company that did a deal to buy Suddenlink last week – could try to overbid Charter. Or go after one or more of the merely large cable companies that still survive – Cablevision, Cox and/or Mediacom, say.

Californian regulators will look at the Charter-Time Warner-Bright House deal differently than the feds. Stay tuned.