Comcast Corp. (CMCSA:US) asked for U.S. approval to shed 3.9 million customers and transfer cable systems to Charter Communications Inc. (CHTR:US) as it seeks regulatory clearance of its $45 billion purchase of Time Warner Cable Inc. (TWC:US)
Comcast and Charter in a filing today told the Federal Communications Commission the transfers will benefit the public.
The arrangement could help Philadelphia-based Comcast, the largest U.S. cable company, appease critics of its proposed takeover of No. 2 Time Warner Cable by reducing the combined company’s market share to less than 30 percent.
Comcast has touted the deal with Charter as a concession to regulators who will vet its Time Warner Cable acquisition. Critics, including U.S. Senator Al Franken, a Minnesota Democrat, have said that Comcast will be too large, have too much power and try to raise prices for consumers.
The deals need approval from the FCC, which assesses whether the public interest is served, and from the Justice Department, which asks whether deals harm competition.
Charter will be acquiring 1.4 million customers and a 33 percent ownership stake in a new, publicly traded independent cable company with 2.5 million subscribers, Justin Venech, a Charter spokesman, said in an e-mail.
Comcast will acquire Charter systems in New York, Los Angeles and Dallas-Fort Worth, Texas, all cities where it also will acquire Time Warner Cable systems, according to the filing. The changes won’t add to Comcast’s market power in program buying, the filing said.
After the transactions, Comcast will have a presence in 16 of the top 20 media markets, and will serve less than 29 percent of U.S. pay-TV customers, according to the filing.
Comcast is to transfer nine local cable networks to Charter, including five in Ohio, according to the filing. Comcast is to receive three “small local networks” from Charter, the companies said.
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