Two of the biggest cable providers in the United States are about to join forces — at least, if they have their way. Comcast announced this morning its intentions to acquire Time Warner Cable for $45.2 billion, slightly more than the $44 billion figure that was rumored late last night. Time Warner shareholders will likely give a nod of approval — they’re receiving about 17 percent more per share than the stock is valued at, according to Bloomberg — but the main obstacle is going to be U.S. regulators.
While both Time Warner and Comcast said the deal is expected to close by the end of this year, there will no doubt be fair competition questions. Will the two create a monopoly? As it stands, most cable markets only have one provider, which is problem enough for most consumers. Both firms think, instead that it’s going to create a better environment for customers of Time Warner Cable and Comcast. “This combination creates a company that delivers maximum value for our shareholders, enormous opportunities for our employees and a superior experience for our customers,” Time Warner Cable CEO and chairman Robert Marcus said.
This begs the question of what the pros are for the customers. Apparently consumers can expect to save on costs while also benefiting from faster Internet speeds and an improved video experience. Enterprise customers should also see improvement, while advertisers now have more eyeballs in one place. It certainly sounds enticing, but from our experience with cable networks we can’t say we’re super excited to see a giant one forming. The main problem is that we fear it could create a firm that knows customers have no other choice, and so will put up with poor customer service and high rates without other alternatives out there. At least, that’s one of the primary concerns with any monopoly. U.S. regulators will get the final say.