Consolidation of smaller cable TV and Internet service providers across the U.S. may be on the horizon, according to a New York Times report published today.
Charter communications is considering a merger that would see it buy significantly larger competitor Time Warner Cable, according to anonymous sources in the NYT’s report. The deal is apparently engineered by veteran telecom deal-maker John C. Malone, whose Liberty Media Group has a 27 percent stake in Charter.
The report indicates that, if the merger is successful, Malone would urge the newly formed company to gobble up other cable providers, too. The purpose of this would be to make a serious play against Comcast, which is by far the largest broadband Internet and cable TV provider in the country. Some of the smaller providers it could swallow include Cox Communications, Cablevision, DirecTV, and Dish Network.
Charter would easily save a ton of money in content licensing, if it were to buy TWC — up to $400 million per year the report estimates.
On the high-speed Internet end of the business, consolidating providers would mean that cable companies may have the resources to boost connection speeds closer to Google Fiber’s 1Gbps connection. One downside would of course be in the price people pay for subscriptions. Most regions of the country only have one cable TV/Internet provider available, which means there isn’t anything to keep high subscription prices in check.
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