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Comcast confirms plan to shed nearly 4M cable customers

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Comcast(s cmcsa), the country’s largest cable company, announced Monday that it will divest 3.9 million subscribers to regional cable operator Charter as part of a plan to ease regulatory concerns over its proposal to acquire Time Warner Cable(s twc).

The planned divestures, which have been valued at around $20 billion, call for Comcast to sell 1.4 million subscribers to Charter directly, and to create a spinoff corporation to serve 2.5 million customers that will also be owned in part by Charter. The plan also calls for a swap of existing customers, with Comcast acquiring Charter subscribers in Los Angeles and Charter acquiring Comcast subscribers in the Midwest.

The plan is consistent with what Comcast proposed in February when it announced plans to swallow its second biggest rival, Time Warner Cable.

Comcast has argued that the plan to divest subscribers should alleviate antitrust concerns over the merger, since it will mean that Comcast and Time Warner Cable will control less than 30 percent of the cable TV market if the spinoff and sale to Charter takes place.

As Om and others have argued all along, however, the cable issue is largely a red herring that does not address the real significance of the Comcast-TWC merger: new consolidation of power the merged companies will have on the broadband internet market.

The merger must still overcome regulatory hurdles from the Federal Communications Commission and the Justice Department. Comcast has suggested the deal could close by the end of the year.

5 Responses to “Comcast confirms plan to shed nearly 4M cable customers”

  1. Marco Zamora

    Does anybody else get their hackles raised by the language of ‘XCompany will “sell” their customers…” and “… will divest subscribers,” as if we’re nothing but chattel?

    In a real market economy for data and media utilities, customers would choose to go from one competitor to another, not be horse-traded to placate topsy-turvy regulations.

  2. Max Broeder

    The sale of subscribers to Charter is only a part of the usual cable industry practice that trades subscribers that are off-net to other operators for whom these subs are on-net. This is only moving the pieces around with no “real divesting” of subscribers. Don’t be fooled by Comcast’s moves.