Monday, June 25, 2018
Business

Trigaux: Charter ready to close on Bright House as business leaders give thumbs up to cable deal

Charter Communications CEO Tom Rutledge, eager to close on the cable TV deals to buy both Bright House Networks and Time Warner Cable, told investors this week he expects the acquisitions to be wrapped up soon.

"Everyone has had their say," Rutledge said in remarks to a major Charter investor gathering. "The FCC's (Federal Communication Commission) shot clock has stayed ticking as a result of our responsiveness so far." A few local authorities remain to sign off on the combined $65 billion-plus deals and the financing is in place, he said. "We're sitting here, ready to close."

Some of the big cable competitors are complaining to the FCC that these deals should not go through. Satellite TV provider Dish Network recently told the federal regulator that the Charter deals would create a "suffocating duopoly." And a trade group representing AT&T and Verizon urged the FCC to limit the influence of major Charter investor and billionaire John Malone so that TV programming from the likes of Starz or Discovery Communications is available on an equal footing to all providers.

If industry competition expressed concerns over Charter, few local Tampa Bay area business leaders did. Most seem eager to bring Charter's services here based on a review of comments filed at the FCC. The regulator's comment period on the Charter deal closed Thursday.

St. Petersburg Area Chamber of Commerce CEO Chris Steinocher wrote that his group favors the Charter deal "because we believe its investments would spur economic growth and bring high-quality products to our members."

In a similar comment from the Clearwater Regional Chamber's CEO, Carol Hague wrote that Charter is expected to invest $2.5 billion toward commercial networks, "contributing important upgrades and competition into this influential market."

At the Tampa Bay WaVE, a growing downtown Tampa start-up incubator, CEO Linda Olson wrote the FCC that the arrival of Charter would "provide the services our entrepreneurs need to succeed." Chuck Papageorgiou, chairman of Tampa Bay Tech Start, echoed Olson's remarks, adding that Charter would improve faster broadband services to more lower-income households in the area.

Letters from the Tampa Bay Beaches and Upper Tampa Bay chambers of commerce also endorsed Charter while praising Bright House Networks' past contributions to the business community.

If the Charter deals happen, the company becomes the No. 3 video service provider with 17.2 million subscribers in the country behind AT&T, which recently acquired DirectTV to become the largest cable business, and now No. 2 Comcast.

Barring complications, cable analysts still see the Charter-Bright House deal closing with the "new" Charter service arriving in the Tampa Bay area in early 2016. A similar acquisition by Frontier Communications to take over Verizon's FiOS cable TV services in the bay area is also on track and looks likely to close next year.

Still, industry challenges remain. Charter CEO Rutledge this week expressed growing frustration over the lack of "security" that allows vast numbers of people (university students especially) to watch TV shows for free by using other people's broadband passwords. That hurts the cable industry's bottom line, he told CNBC.

Rutledge also injected a sobering perspective about the state of the U.S. consumer's economic standing, saying more and more people simply can no longer afford cable TV. The U.S. population is poorer with more people having left the workforce and more people using food stamps, he said.

"The average person has gone backwards," Rutledge said.

And that is a problem for companies like Charter that want its services — especially its pricier and more profitable bundled packages — to reach as many people as possible.

Contact Robert Trigaux at [email protected] Follow @venturetampabay.

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