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Comcast Offers To Shed 3.9 Million Subscribers To Ease Cable Deal
An anonymous reader writes "In a bid to win regulatory approval for its proposed $45 billion takeover of Time Warner Cable, Comcast has offered to sell 1.4 million pay TV subscribers to Charter Communications for $7.3 billion. From the article: 'Comcast also said it would divest another 2.5 million subscribers into a new publicly traded company, dubbed SpinCo for now, to be one-third owned by Charter and two-thirds owned by Comcast shareholders. The deal will make Charter — whose own bid for Time Warner Cable was thwarted by Comcast's higher offer — the second-biggest U.S. pay TV company with 5.7 million customers, overtaking Cox Communications Inc.'"
Until Comcast gets split into NBC and ISP again, no one will ever support them in expanding their business.
To think that I was wasting money on bitcoin ... when I should have been trading Comcast users ...
It isn't the subscriber base. It's the control of content creation.
Why do I get the feeling that the Rural locations are going to be part of this group. You know the group that may have miles of cable to maintain, for a less populated group of people. And giving up that group, to the competition prevents them from keeping their costs down, as they are covering more expensive areas to maintain. Thus making them seem less appealing. Causing people in that region to try to get a more affordable service in that area. Thus making Comcast look like the savior coming in to save the day!
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
This is a good deal for those who are getting Charter or Spinco (will be managed by Charter) out of the deal. Charter has a fairly open peering policy https://www.charter.com/browse....
translation screw 3.9 million customers with even crappier service....
...wherein we find our hero offering to "sacrifice" with petty divestments to "competitors".... as if they'd ever face any true regulatory action - they spent a lot of money on those guys, after all.
I'm sure the people in question don't mind being sold to a different company.
Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
Not sure I understand how they can offer to "sell" customers. Wouldn't the customers be able to choose who they pay for their service/ Or is Comcast admitting that they totally control the market?
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Does this mean a cable subscriber is worth ~ $5000 to a cable company?
Comcast is trying to spin this as being some kind of big "we won't be a monopoly thanks to this so don't regulate us" concession.
It's effectively carving up the markets between Comcast and Charter, though.
Comcast "gives" Charter 1.4 million subscribers. In addition, Comcast swaps 3 million subscribers in Wisconsin, Ohio, Kentucky, Indiana and Alabama to Charter in exchange for 1.6 million subscribers in "New York, Connecticut, Massachusetts, California, Texas, Georgia, North Carolina, Tennessee, Virginia, Washington, Maryland, and some smaller areas contiguous to existing Comcast or Time Warner Cable systems." [Source] Then, about 2.5 million customers will be served by a new company that is run 2/3 by Comcast and 1/3 by Charter.
Effectively, Comcast is "dropping" about 4.5 million customers but what they are really doing is carving up the market with Charter so that each won't need to compete with the other. They'll each stay in their own little geographic area and everyone is happy. (Where "everyone" means the cable companies, of course. Not the customers who will see higher and higher bills with little to no competition.)
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
They're only shedding 1.4 million subscribers. The others are being spun off to a corporation which they will control and they're probably buy out Charter in 5-10 years. This is a low-ball offer. I would bet more is to come.
Sadly, you might be way off too low. I currently have Time Warner Cable TV and Internet. The only reason we've kept TV so far is that Time Warner gave us a good deal on the TV. We pay $85 a month with this "good deal." If we paid full price, we'd likely be paying $120 or more a month. Of course, at that point, we'd cut cable and save the money. As it stands, cable is hanging on by a thread.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
Got the news earlier this year that the area I live in is on the short list for fiber next year.
Crapcast can bite me if it shows up.
A bullet may have your name on it, but artillery is addressed to " Whom It May concern"
Except there are associated costs. "Gross income" is a poor metric on subscriber value. Honestly, I think it is a terrible deal for Charter (though I pay Charter close to $200 per month as a customer).
Charter has to pay a multitude of companies for the programming they carry, on a per-subscriber basis. I'm sure they have a decent profit margin, but after infrastructure costs, access fees to programming, and other costs, how much profit is actually being made per month, per subscriber? I suspect it would take 20 or more years to see a profit on those subscribers at that cost.
Yes, they can.
As a part of a 'market', companies can buy, sell and trade you. You thought Lincoln put an end to that?
"You will do as you are told. Until the rights to you are sold." - F Zappa
Have gnu, will travel.
You scratch our back (send your lobbyist to fight for the merger) and we'll scratch yours (sell you areas you don't currently server.)
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Of course as a non-cable customer I may be way off on the $100/month bill.
No. That's a good guess.
You* could try running those numbers through a present value calculator with assumptions about inflation and interest rates. That will give you an idea of how much Comcast expects to grow this $100 figure.
*I would, but I'm too lazy.
Have gnu, will travel.
need to have better cableTV they can't even show of there local RSN feeds in HD in big markers but u-verse and directv can.
on 4/25 Directv and U-verse had all 3 HD feeds of CSN chicago on but comcast cable only had 2 of them.
Comcast still dose not have the BIG TEN alts in HD, goal line HD, pac12 HD (out of market), Game 3-9 HD, Team 2-9 HD, nbc premier league extra time feeds as real channels, and more that other cable systems have (TWC does have them).
If you were sold to someone for over $5200, don't you think that they would be thinking about how to get paid back for that "investment"? Where do you think that money is going to end up coming from?. This is a bad deal for everyone who has cable, and indeed a bad deal for everyone who watches TV. It will only serve to drive up cable prices for everyone, and even serve as another incentive to further discriminate against the "free air" viewers.
I'm an American. I love this country and the freedoms that we used to have.
Meet the new boss—same as the old boss.
This attitude is only possible because of monopoly status. Remove their monopoly status and the market will self-correct.
It's ridiculous one company can just 'sell' its customers. Customers should have the choice. This is ridiculous and unfair and shows any semblance of 'regulation' of the field is a joke. Regulation in name only.
How about if I just sell a couple of 'bought' Congressmen? Because they weren't doing much anyway, other than pissing me off.
If this were Usenet, I'd killfile the lot of you.
What in the fuck are the regulators even REGULATING?
The new theory on regulation (since approximately the 80s) is that it's bad, and thanks in large part to an economist and a Federal judge (both named Posner) the new theory is that there is no such thing as monopoly abuse -- so there's no need to regulate monopolies, because a monopoly that abuses its position will always have a competitor spring up and underprice them.
Lacking <sarcasm> tags,
Really? So we are going to let a company (Comcast) placate the regulators by doing two things? First, by selling some of their customer base to a competitor and then spinning off another competitor. This should NOT happen.
Fist, anytime you have to sell off part of business in a merger to keep the regulators happy it should be a HUGE red flag. It means that you fully realize that your proposed merger is going to create a company that is too large. I hear shades of Microsoft trying to *GIVE* M$ Money to a competitor in order to buy Intuit in a deal that got rejected by regulators (if I recall correctly). Even if the competition is OK with the deal, any horse trading like this should pretty much be considered an admission that the resulting company is too big.
Second, can anybody imagine why you'd want to create some new company when doing a deal like this? Why do they want two separate companies? Usually it is expensive to split a company and unless the two businesses are TOTALLY different kinds of business it usually is more expensive to run two companies over one. So what are they going to gain? One reason they spin off similar companies is to restructure debt and position future liabilities. You take the bad parts of a company (that nobody wants to buy) and spin them off to rid yourself of debt and liabilities, which you dump into the spinoff. So if you see a segment of your business is dying, or the future liabilities are looming (like expensive Union pension plans and older employees) you unload them. Then the child company dies a slow and painful death trying to deal with the debt while the parent lives on.
Both of these actions tell me that Comcast knows that the merger will not be approved so they are grasping at straws in a vain attempt to placate regulators. This merger may still happen, but if it goes though it will be a bad deal for consumers and I'll bet that we find out that Comcast dropped some serious money behind the scenes in the form of bribes, campaign contributions, and lobbying to make it happen. Crony politics are in play and I guess Comcast didn't donate enough to campaign coffers in the last round, or they really need money badly this time around.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
If I only have access to a single cable company, does it really matter if that company is Comcast, Time-Warner, Charter, or SpinCo?
Comcast aired a radio commercial in DC Metro this morning saying that the Comcast-TWC merger would guarantee "net neutrality", higher speeds and more Internet for everyone. This tells me most people think that 1) Net neutrality is a good thing and 2) They have no idea what it really means.
Plus, there's a another front on the net neutrality battle - some companies are claiming that net neutrality allows freeloading - using capacity without paying for it. But what's the reality? That everyone pays for usage - my company's fleet of 10 cars pays the same roadway toll per car as another company with a fleet of 10 cars. BUT - the toll road operator has the right to let the other company's cars into the fast lane and shunt my company and the individual to the slow lane if they so desire.
Is that right or wrong? I have not been able to find a clear citation to answer that question. Citations, anyone?
I'm sure that they are counting on their improved monopoly position post merger to allow them to make up any temporary loss of subscribers.
This is a loss leader intended to distract the regulators.
I don't read your sig. Why are you reading mine?
If corporations were really people, we could send them to prison.
Corporate "personhood" is a laughable fiction, embraced only by our insane Supreme Court and business conservatives, Though, granted, it would be nice to think we could have lead Enron away in handcuffs the way we could have a real person.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
Do this in a way that you end up with a mix of Charter and Comcast customers in each market. True competition in cable never took place because once the cable was strung, no one else wanted to do it - and cable companies were not subject to the same wire-sharing that phone companies were. So every market currently has one carrier, and no company has any incentive to provide greater value. Our cable bill increases 5% every year and the number of channels is reduced every year. The only way to switch is to hire a moving truck. If these companies have enough money to buy each other, they have enough to string some cable.
"Win treats sysadmins better than users. Mac treats users better than sysadmins. Linux treats everyone like sysadmins."
I would only go for this if they spun me off to Google Fiber. Then I would jump at the chance.
How about instead of transferring customers like they were cattle, you let them have a freaking CHOICE?
If Slashdot were chemistry it would look like this:Cadaverine
There's too much common ownership between Comcast and Charter... this is really the managers of good customers selling some systems to the managers of not-so-profitable customers.
Spin off the content part of the business.
Have gnu, will travel.
Just start dropping cable. I did 4 years ago and haven't gone back. I'm strictly "over the air" now I get 11+ channels in the new 'digital" airwaves, plus streaming video/tv series over the internet. WTF do I need cable for? If enough people DROP their cable subscriptions - they will get the hint real quick. The ONLY thing these guys understand is $$$$$$. If you have one area where they suddenly lose %50 or more of their subscribers dropping their service, they will eventually have to listen to US!.
The Truth is a Virus!!!
In many areas, you only have one, maybe two choices for an ISP. This does nothing to help that. We need more competition, not more mergers.
They'll just end up buying Charter in a couple years anyway.
The Internet King? I wonder if he could provide faster nudity.
Its really a content owner vs broadband/content distributor issue. Combining the 2 have made for bad business for consumers and something should be done now before it gets worse. Take Netflix, DISH, DirecTV et al, they are all at the mercy of the content owners. If the content owners wanted to put any out of business today they could. The content distributors have no tangible fixed assets except their satellite head-ends and birds in space. The rest of their value is customers and their own proprietary gadgets worth nothing to the rest of the world. Comcast owns tons of stations and will own more if joined with Time Warner. This will bring higher prices to all the content distributors small and large wishing to carry Comcast owned content. If you are a DISH or DirecTV customer you have lost stations because of this.
Comcast doesn't own Fox News. Comcast owns MSNBC.
None of the cable providers own Fox News. Except for broadcast TV (which is off-topic), Fox News is independent of any regulated industry and News Corp. is not seeking merger approval. Any discussion of Fox News is off topic. Also, unlike MSNBC, Fox News is not friendly to the Obama Administration. So what's the point of bringing them up? To scratch the itch of Fox-News-haters?
The one question I've never seen anybody ask. (so, I'll ask it) Do you trust one company to know all of the following: (and who will they share that with? and how much money is that pile of data worth?) 1. What time(s) your TV set(s) are turned on/off 2. What channels you watch (and with multiple sets, your families viewing habits too (each cable box is uniquely identified) 3. How do your viewing habits compare to your neighbors? 4. How do your viewing habits compare to your extended family? 5. How many children are in your home, and what time of day are they there? 6. Based on your street address are you likely to watch (FOX, ABC, NBC, CBS, CNN, Al Jazeera, RFD-TV, BBC)? 7. What is the correlation between your web surfing habits and your TV viewing habits? 8. You have been observed at https://whitehouse.gov/some_sp... on your Safari browser while 1 TV in your home was tuned to the annual State of the Union address. 9. You just watched an advertisement for Viagra on NBC , national news, commercial break 3. You open your web browser on your iPad and start surfing midget porn. The next week you begin receiving spam related to "news junkies who have ED issues resorting to midget porn and there's an app for that". 10. With silly season 2014 almost underway and sillier season 2016 just around the corner, do you really want any political party, special interest group, PAC, or mega company knowing when you wipe and what brand of TP you prefer?
That's why Comcast and Charter are creating a "new" company.
While they charge cable operators franchise fees. Very few prevent competitors from coming in. It's just most of the telcos in this industry have behind the doors non-compete agreements.
If corporations are not people, then they cannot be greedy (as greed is a human vice)....
It's funny how they can keep a straight face and request a merger that'll make them bigger when they are currently actively abusing their literal government granted data transmission (as opposed to MS's 'virtual' OS) monopoly to extort money from other content providers like Netflix.
The only condition I would put on this merger is that Comcast separates wholly from NBC/Universal/etc. content providers, and becomes just a data pipe common carrier.
Then regulate the hell out of them...
Break them into three separate companies. One ISP, one television, and one that owns the lines. And anyone can lease the lines.
Heck, could even allow Netflix to become an ISP. Get your Netflix+Internet.
I'd like to be one of the subscribers they shed. Where do I sign up?
'Comcast also said it would divest another 2.5 million subscribers into a new publicly traded company, dubbed SpinCo for now, to be one-third owned by Charter and two-thirds owned by Comcast shareholders.
In other words, Comcast STILL owns them. They're just revenue sharing with Charter at that point and we now have an even NASTIER Trust issue as Comcast and Charter would now be FINANCIALLY tied together by this erstwhile "third company".
This would probably be even WORSE for consumers than if Comcast just kept the clients and told Charter to go suck a dick.
The problem here is not competition between Charter and Comcast.
As has already been pointed out, THERE IS NO SUCH THING AS COMPETITION in ANY of these markets. There's simply a bunch of individual monopoly positions.
Basically this situation is not going to be remedied whether there's 1 company or 101 companies handling all cable subscribers in the US.
The problem right now is the monopoly business model of the cable industry.
With the destruction of analog broadcast television, consumers who wish to watch television are basically forced onto expensive cable plans.
On top of this, the fact that Comcast is in bed with the content producers of the television industry, and that they're so damn huge, gives them ZERO incentive to keep from raking new media content provisioners (Amazon, Google, Netflix, etc) over the coals or blocking/degrading traffic through their network unless they pay "protection money".
And keep in mind, this is for content BEING REQUESTED BY THEIR SUBSCRIBERS!
This is NOT "unlimited internet".
This is VERY limited internet. Whenever they decide they want to extort money out of someone, they simply start dropping requests for their traffic. Regardless of what the consumer, who's PAYING THEM TO MAKE THE CONNECTION HAPPEN PROPERLY, wants. So the consumer is stuck paying for service that Comcast is deliberately sabotaging.
And this kind of abuse of power and position is going to get better by them simply divesting a few milllion subscribers to a shell company they still control and paying the next biggest fish in the pond a bribe? BULLSHIT!
This deal needs to be nixed. I dislike Big Government. But this is one instance where the government needs to step in and make some serious changes to the industry and how it operates.
Chas - The one, the only.
THANK GOD!!!
I suppose that depends on where you live. I have three choices for cable where I live. 1. Time Warner Cable, 2. Verizon FiOS, and 3. Dish.
The first two compete for phone, internet and cable services while the last one only for TV and possibly internet if you don't care about latency much.
Not that this makes it a free market, but it's better than nothing. You do understand the alternative to giving the vendors access rights is pretty much no service at all right? But I'm sorta with you in that I think such agreements should be time limited and/or require non-exclusive arrangements to allow multiple providers to use the infrastructure. Say the company that puts in the cable lines gets 10 years exclusive use and then surrender the whole infrastructure, or they must allow third party use of the infrastructure in a way that fosters competition.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101