COMCAST TO DIVEST 3.9 MILLION CUSTOMERS OF MERGED COMCAST – TIME WARNER CABLE CHARTER TO ENHANCE SCALE AND IMPROVE GEOGRAPHIC FOOTPRINT DIVESTITURE WILL BE EXECUTED THROUGH THREE SEPARATE TRANSACTIONS, INCLUDING THE CREATION OF A NEW, INDEPENDENT, PUBLICLY-TRADED CABLE PROVIDER
PHILADELPHIA and STAMFORD, Conn., April 28, 2014 /PRNewswire/ — Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Charter Communications (Nasdaq: CHTR) today announced that the companies have reached an agreement (the “Agreement”) on a series of tax-efficient transactions, whereby the combined Comcast-Time Warner Cable entity, following completion of Comcast’s previously announced merger with Time Warner Cable, will divest systems resulting in a net reduction of approximately 3.9 million video customers. The divestiture follows through on Comcast’s willingness to reduce its post-merger managed subscriber total to less than 30 percent of total national MVPD subscribers, while maintaining the compelling strategic and financial rationale of its proposed merger with Time Warner Cable.
Pursuant to the Agreement, and following the close of the Comcast-Time Warner Cable merger, Charter will acquire approximately 1.4 million existing Time Warner Cable subscribers, increasing Charter’s current residential and commercial video customer base from 4.4 million to approximately 5.7 million, and making Charter the second largest cable operator in the United States. Charter and Comcast will also each transfer approximately 1.6 million customers respectively. In addition, Charter, through a tax free reorganization, will form a new holding company (New Charter) that will own 100% of Charter, and acquire an approximate 33 percent stake in a new publicly-traded cable provider to be spun-off by Comcast serving approximately 2.5 million customers (“SpinCo”). Charter will provide management services to SpinCo. In aggregate, today’s announced transactions will significantly enhance Charter’s scale and improve both companies geographic footprint, driving operational efficiencies for Comcast, Charter and SpinCo.
The Agreement has been approved by the Boards of Directors of both companies and Time Warner Cable’s Board has consented to the Agreement as required under the Comcast-Time Warner Cable merger agreement.
The internet as we know it in America is about to fundamentally change, and it’s because our politics are too broken to stop it.
On Wednesday, the Wall Street Journal reported that the Federal Communications Commission is about to issue new rules for internet service providers that will allow them to create “fast lanes” of service that will allow companies like Netflix and Amazon to deliver their content faster than competitors. That’s a first for American internet policy, and it’s strictly against the rules in other countries, particularly in Europe.
Allowing big companies to pay for prioritized access to consumers flies in the face of the internet’s egalitarian ideals, which allow anyone or any company free access to a vibrant market free of tolls or restrictions — allow service providers like Comcast and AT&T to start creating artificial barriers to entry, and you make it harder for the next generation of college kids to start the next Facebook or Google. As a whole, the various rules that protect these ideals are generally called net neutrality — they’re the rules that say your service provider has to treat all internet traffic equally, and shouldn’t be allowed to block, degrade, or enhance access to certain websites or services.
It was actually illegal for service providers to create fast lanes in the US until January, when an appeals court struck down the FCC’s 2010 Open Internet rules after a lengthy court battle with Verizon. The 2010 rules were a big deal — President Obama even made the open internet a part of his 2008 campaign platform, saying “I’ll take a backseat to no one in my commitment to net neutrality.”
In what would amount to a reversal on net neutrality, the Federal Communications Commission will propose new rules that would allow companies like Netflix and Amazon to pay for high-speed delivery of their content, The Wall Street Journal and The New York Times reported Wednesday.
The rules to be presented Thursday would prevent Comcast, Verizon, and Time Warner from blocking or throttling individual websites called up by users, the Journal’s Gautham Nagesh reported. But broadband providers could offer companies preferential treatment for speedier lanes to get their content quickly to consumers based on “commercially reasonable” terms. Consumers could end up paying more for services if companies pass on the additional charges.