Comcast To Shed 4M Subscribers To Help Time Warner Deal

Comcast is trying to make its proposed $45B acquisition of Time Warner Cable as easy for regulators to approve as possible by giving millions of its customers to Charter Communications.

By handing over 4 million customers to Charter, Time Warner Cable will no longer be the second largest cable provider. Instead, Charter will take that spot, with a total of 5.7 million subscribers.

A Multi-Pronged Deal

Comcast, which announced the plan on Monday, may be losing 4 million subscribers but only 1.4 million of those are actually being handed over to Charter. The other 2.5 million customers will be placed under the control of a completely new publicly traded company. That company, which doesn't currently have a name, will be owned in part by Charter and Time Warner Cable. Charter will have a 33-percent stake in the company whereas Time Warner Cable will have a 67-percent stake.

The primary goal of the deal with Charter is to keep Comcast below a market share of 30 percent. Even though that figure is not legally required, keeping a relatively low market share will at least allow for continued competition in the cable industry.

TWC Acquisition

Comcast's plan to get rid of some of its subscribers and move others around was first announced in connection with its planned acquisition of Time Warner Cable earlier this year. Now that the details have been released, it is even more obvious that Comcast is looking to make it easier for regulators to approve the deal by showing them that the industry will be better if the acquisition goes through.

We caught up with Jeff Kagan, an independent technology analyst, to get his view on the deal between Charter and Comcast and how that deal will affect the much larger acquisition of Time Warner Cable. He told us that it is...

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