Comcast Offers To Shed 3.9 Million Subscribers To Ease Cable Deal 154
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.'"
The Great Customer Swap (Score:5, Informative)
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 [dslreports.com]] 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.)
Re:So lets sell off the unprofitable areas. (Score:4, Informative)
Telecommuting is becoming more common and you can do it from anywhere, which is what makes the sticks appealing.
I live in a rural place but not so rural that I can't get gas or go to a grocery store 24/7 and telecommute to work. I drive my car a few times a week and rarely over 50-60 miles/week. I enjoy a small mortgage payment, lower property taxes, and less crime. I'm much better off financially than co-workers in higher cost of living areas.
I spend time throwing BBQs and tending my lawn which is much bigger than anything you get with a city apartment {when I was in college the dorms where barely larger than my patio}. This week end I may go fishing if the weather is good... it's not far to drive.