U.S. cable industry’s rush to consolidate continues

by Steve Blum • , , , , , ,

How the game is played.

Altice SA announced an agreement to buy Cablevision for $17.7 billion and assumption of existing debt yesterday. That follows Altice’s ongoing bid to buy a controlling stake in Suddenlink. If both deals are approved and Charter is allowed to take over Time Warner and Bright House, then Altice would become the fourth largest cable company in the U.S., and the seventh largest pay TV company overall, with about 4 million subscribers. AT&T/DirecTv, Comcast, new Charter and DISH would be bigger. Verizon FiOS and Cox would be too, but not by as much. Cox would be a few hundred thousand subs ahead of Altice and Verizon would have about 1.5 million more.

This latest deal wouldn’t directly affect California – Cablevision’s systems are on the east coast – but the indirect implications could prove interesting.

Altice’s takeover of Suddenlink hasn’t generated any significant opposition while the California Public Utilities Commission has been reviewing it. That’s not a surprise: as a standalone proposition, it wouldn’t change the competitive landscape for broadband providers. But package Suddenlink and Cablevision together, and the national market would become less competitive. It also impacts the competitive assessment of the Charter deals. Both the CPUC and the Federal Communications Commission will be considering whether to allow the top seven companies to recombine into the top four.

If that happened, the broadband market nationally and in California would become much more concentrated, which raises the same kind of concerns that killed Comcast’s attempt to swallow Time Warner and Charter earlier this year.