Charter/ Bright House Deal: Cable Industry Looks More and More Like Telecom

The cable industry is looking more and more like the telecommunications industry with Charter Communications’ announcement that it plans to acquire Bright House Networks. Charter already was positioned to be the nation’s second largest cable company as the result of a pending deal that would put certain Time Warner Cable properties into Charter’s hands whenever Comcast’s plan to acquire Time Warner Cable is completed. Assuming that deal is completed, Charter also would own one third of a spin-off company comprised of certain current Comcast properties.

The upshot is that Comcast and Charter are playing roles quite similar to those that AT&T and Verizon played some years ago in telecommunications, where between the two of them they gobbled all but one of the original seven regional Bell companies -- and despite some recent sell-offs, the two telecommunications companies are still the dominant players in the market. Charter CEO Tom Rutledge cited scale as a key driver of the acquisition plans. At a time when content costs are climbing steeply, more and more video providers are seeking mergers and acquisitions as a means of increasing their negotiating power with content providers. Bright House CEO Steven Miron noted that the cable business is becoming more “centralized,” also contributing to the increased importance of scale.