Comcast has confirmed today its plans to divest 3.9 million subscribers to cable TV and Internet service provider Charter.
The move comes as a result of Comcast’s tentative merger with Time Warner Cable, the country’s second largest TV service provider. Since the deal still needs approval from federal regulators, Comcast is hoping that by divesting a portion of its subscribers, it’ll help move that process along.
These plans, of course, are dependent on the TWC merger gaining approval. This was also something Comcast initially said it would do when it first announced its merger with TWC.
Should the deal go through, Charter will become the new second largest cable/Internet provider in the country, with 5.7 million subscribers — 1.4 million of those coming from TWC.
Additionally, Charter said it will form a new holding company (New Charter) that will own the old Charter company. This “New Charter” will also acquire a 33 percent stake in a new publicly-traded cable provider company (tentatively called SpinCo) being spun off by Comcast to serve another 2.5 million customers.
So it sounds like Comcast wants to keep some sort of control over a portion of the subscribers it is giving up. That deal is still beneficial to Charter, but it also means another big cable company is one step closer to being consolidated.
That said, I wonder how many years it’ll take before Comcast starts pushing federal regulators for a Charter merger.