FCC Approves Charter Communications’ Acquisition Of Time Warner Cable Inc

Time Warner Cable

Time Warner Cable will cost Charter Communications $56.7 billion.

On Friday the U.S. FCC (Federal Communications Commission) said that it had given the go ahead for Charter Communications Inc’s purchase of Time Warner Cable Inc and Bright House Networks which will make the business the second-largest broadband provider in the United States.

Out of a five-member FCC vote, the majority approved the deal earlier this week meaning that the provider now just requires approval from regulators in California. Last month the deal was recommended by a state administrative judge who advised California’s public utilities commission to give the acquisition the green light. The final decision is due on May 12.

Following the news of the approval, Tom Rutledge, president and chief executive of Charter, said that the merging of the three companies will have “significant benefits”, some of which being wider access to low cost broadband, further competition and new U.S. jobs. He also added that the conditions imposed by the FCC “are largely extensions of the longstanding consumer friendly values and practices of our company.”

The FCC said in a statement on Friday that an “order detailing the commission’s reasoning and the conditions will be issued in the coming days.”

The acquisition of Time Warner Cable has been valued by Charter at $56.7 billion, not including debt, and the purchase of Bright House at $10.4 billion.

The U.S. Justice Department did give antitrust approval to the deals on April 25 and earlier Charter and Time Warner Cable shareholders approved the companies’ deal. Conditions issued by the Justice Department were to ensure competition remained at a time when the pay television industry has began to stagnate due to online rivals such as Netflix and Hulu. One term included stopping Charter from advising its clients not to sell shows online.

Other conditions set by the FCC include Charter providing high-speed internet access to an additional two million customers within the period of five years whilst one million is served by a broadband competitor.

The two operators have had numerous discussions between 2013 and 2014 however they ended after Time Warner Cable rejected Charters approaches instead moving towards Comcast Corp, the top cable service provider in the U.S. although the deal eventually collapsed.

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