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Cablevision, the New York cable provider, said today that it will purchase Bresnan Communications for $1.37 billion in a bid to move into Western states such as Colorado, Wyoming, Utah and Montana where Bresnan has subscribers. Cablevision (s cvs), the nation’s fifth-largest cable operator, will gain 300,000 subscribers as part of the deal, which it expects will be completed in 2011. We can expect more such deals now that new broadband subscriptions have flatlined, and providers begin to consolidate.
Cablevision won the bidding for Bresnan, which also saw bids by Time Warner Cable (s twc) and Charter Communications. The deal could act as a spur for faster Internet speeds in that area of the country, as Cablevision has been an early deployer of technologies such as DOCSIS 3.0 for faster broadband speeds and wide-scale Wi-Fi networks for subscribers. Bresnan currently advertises speeds of up to 15 Mbps down with 1 Mbps up on its site, a far cry from the 101 Mbps that Cablevision has touted.
Last year, a Bresnan executive noted that the cable provider was deploying DOCSIS 3.0 in its plants, but that the customer modems were expensive. In many of its markets, Bresnan competes with Qwest (s Q), which CenturyTel (s ctl) said it would buy in a deal worth $22.4 billion in April.
The deal shows that smaller cable providers, which are squeezed by high programming costs, are also not immune to the pressures caused by the lack of growth coming from new broadband and pay-TV subscribers. Bresnan recently rolled out digital voice in some of its markets, which could give it a boost, but most ISPs are looking for growth in increased fees for subscribers or through broadband stimulus bucks. Some are consolidating and others are looking to get out of rural markets altogether. Cablevision’s bet seems to be that getting bigger is better for the time being.
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