Like a hydra, when one massive broadband merger is killed another springs up in its place. A month after Comcast walked away from buying Time Warner Cable for $45 billion, Charter announced its intent to buy Time Warner Cable and wrap it into an already-announced Brighthouse acquisition in a deal valued at $78.7 billion inclusive of debt.
The proposed Charter and Time Warner deal would change the landscape of the U.S. broadband market by combining the second and third-largest cable-based broadband providers, and creating a new company with a total of 19.4 million broadband subscribers once the Brighthouse customers are added in. When you factor in all of the customers the combined companies would have a total of 23.9 million. This leaves the combined entity behind Comcast’s 22.4 million subscribers, but shoves the newly combined company ahead of AT&T for the No. 2 slot in total customers.
For broadband customers this deal has a lot of good things going for it, if Charter’s policies hold sway after the deals go through. The company has several progressive policies that may not generate headlines like other ISPs’ gigabit network announcements do, but overall help advance broadband adoption rates and lead to a more competitive market. They are:
- starting its service tiers at 60 Mbps,
- eliminating data caps and overage fees,
- no annual contracts for service, and
- no monthly modem rental fees.
Charter also has a consumer-friendly stance on network neutrality. It promises that regardless of what happens with any lawsuits over the Federal Communications Commission’s new network neutrality laws, it will not block, throttle or engage in paid prioritization of any traffic on its network. Add to this, Charter’s promises to expand its network to serve business customers and the cable company’s plans to become the second largest broadband provider in the country look like a good deal.
Justin Venech, VP of communications at Charter, says that while Charter currently has two service tiers of 60 Mbps and 100 Mbps, it will not downgrade Time Warner Cable markets that have the TWC Maxx offerings of 300 Mbps. TWC launched that offering in Austin, Texas, Kansas City, and a few other markets to compete with the launch of gigabit fiber-to-the-home services.
The challenge for the company, explains Bruce Leichtman, president and principal analyst of Leichtman Research Group, is that Charter splits most markets it is in with another cable company, which means its policies are often overshadowed by larger rivals with bigger marketing budgets. This deal, by consolidating Charter’s hold in many markets should help it gain more prominence. And maybe that means other firms will follow it and offer no-contract broadband without charging consumers for the privilege.
