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Cable company Charter buying Time Warner Cable for $55.3B

 
Charter Communications is planning to merge with Time Warner Cable for about $55 billion — and that includes Bright House Networks, which serves the Tampa Bay area. 
Charter Communications is planning to merge with Time Warner Cable for about $55 billion — and that includes Bright House Networks, which serves the Tampa Bay area. 
Published May 27, 2015

The telecommunications industry's merger fever reached into thousands of Tampa Bay homes Tuesday as Charter Communications announced a merger with Bright House Networks that would transform the local market for television and Internet services.

Charter would become one of the largest TV and Internet companies in the nation with the $10.4 billion merger with Bright House and a $55.3 billion merger also announced Tuesday with Time Warner Cable.

With the February announcement that Verizon was selling its Florida TV, Internet and landline phone business to Frontier Communications, the local market has been turned on its head. Both the Charter and Verizon deals require regulatory approval.

Charter officials, meanwhile, said they would continue operating Bright House's 24-hour news operations, which includes Bay News 9, a staple of Tampa Bay's TV news market.

"We're committed to Bay News 9," said Charter spokesman Justin Venech, who noted that Tom Rutledge, Charter's president, has experience with news operations. Rutledge "was at Time Warner when they launched their local news networks. He was at Cablevision when they launched News 12 on Long Island and Connecticut and New York."

News 12 Networks was one of the first local cable news operations when it launched in 1986.

But some analysts questioned whether Connecticut-based Charter would have the same commitment to local news as Bright House, which has about 2 million Florida customers and 6,000 employees in the state.

"I suspect that in the short run, not much would change," telecom analyst Jack Gold said. "In the longer run, I'd think Charter would want to be more of a pure broadband and TV company with some media production. … So local stations may not fit into their plans."

Rutledge told reporters that he expected the mergers would ultimately lead to lower prices for faster Internet, though company officials said it is too early to discuss pricing specifics.

"With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences and fully featured voice products, at highly competitive prices," Rutledge said in a written statement.

The combined companies — to be called Charter Spectrum — would be the second-largest cable company in the nation with 24 million customers.

The deal comes a month after Comcast, the nation's largest cable provider and owner of NBCUniversal, walked away from a $45.2 billion bid for Time Warner Cable after intense pressure from regulators. The government worried that the company would be able to undermine increasingly popular online video competitors like Netflix because the bigger Comcast would have more than half the nation's high-speed Internet customers.

There has been a wave of consolidation in the cable industry as providers are starting to lose TV subscribers, the costs for TV, sports and movies rise, and pressure builds from online video services such as Netflix. The traditional cable ecosystem is breaking up; you can subscribe to HBO online without having to pay for cable.

"I think Charter is bulking up as much as possible to get to the economics of scale necessary to fight off the competition," Gold said.

Telecom analyst Jeff Kagan said he thought the merger would benefit customers, though it may take a few years before changes take place. With competition, he said, the big companies want to offer more innovative services.

The "bottom line (is that) every cable television company faces the threat of competition and new technology," Kagan said. "So they must update or they will become irrelevant."

A concern for the new company's potential customers might be the most-recent J.D. Power survey of customer satisfaction for cable TV. Charter's ranking in the 2014 survey was below average everywhere it operates. For Internet service, Charter ranked below average in every region but one.

Bright House's J.D. Power rankking was above average for TV and Internet.

Information from Times wires was used in this report. Contact William R. Levesque at levesque@tampabay.com.