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Businesses Television The Almighty Buck

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.'"
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Comcast Offers To Shed 3.9 Million Subscribers To Ease Cable Deal

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  • by Anonymous Coward

    Until Comcast gets split into NBC and ISP again, no one will ever support them in expanding their business.

  • by Anonymous Coward on Monday April 28, 2014 @10:24AM (#46858839)

    To think that I was wasting money on bitcoin ... when I should have been trading Comcast users ...

  • Don't care (Score:5, Insightful)

    by Anonymous Coward on Monday April 28, 2014 @10:24AM (#46858845)

    It isn't the subscriber base. It's the control of content creation.

    • Indeed. Also, content distribution at the levels above last-mile/individual subscriber.

      On the other hand, it seems reasonable to accept that content distribution, and internet/TV service providing, are natural monopolies, and we may as well turn it over to a single company with tight consumer-interest regulation.

      On the third hand, and way old-timers help me out here, it seems that telephone service under Ma Bell was somewhat expensive when compared with today's prices (even accounting for inflation). I supp

      • > and we may as well turn it over to a single company with tight consumer-interest regulation.


        let me catch my breath.. Comcast regulated?!?1

        HAHAHAHBu hahahaha

        You're serious?


      • Re:Don't care (Score:5, Insightful)

        by SuricouRaven ( 1897204 ) on Monday April 28, 2014 @11:06AM (#46859377)

        There's the UK approach: We have the 'company that runs the wires' and the 'company that moves the data.' The BT infrastructure division is obliged to allow any ISP to rent their telephone lines on equal terms*. The company running the last mile service doesn't care about content - they just connect the end users and the ISPs together.

        I can't see it taking off in the US though. The political situation isn't favorable to that sort of regulation, and the lobbying influence too strong.

        *Though there have been many problems with unofficial sweetheart deals for BT internet, as they are another division of the same company.

        • Re: (Score:2, Flamebait)

          by Kohath ( 38547 )

          The US approach: cozy up to the guys in charge of regulating you. Contribute to their campaigns and run a 24-hour propaganda network for their benefit (MSNBC). Then they'll allow you to do whatever you want.

          • I like how you picked just one network (MSNBC) as an example of a "24-hour propaganda network run for their benefit". Gee, I wonder which way your political leanings flail. /sarcasm

            MSNBC was politically left-wing long before Comcast even started talking about buying them, and in fact, before we even had a Democrat president. Both houses of Congress were controlled by the GOP then, and the executive branch. But nice try.

            The fact is, these corporations shower money onto both sides. When people stop frami

            • by Kohath ( 38547 )

              The fact is, these corporations shower money onto both sides. When people stop framing the problem as "left vs. right", and start framing it as "Corps+Pols vs. the Rest of Us", then maybe we'll see something happen. Until then, you're part of the problem.

              I guess that make you the problem then. I didn't mention any political parties. I didn't mention left vs right at all. You did. My post is exactly "Corps+Pols vs. the Rest of Us". The partisan talk is all you.

            • You act like the two sides vying for control are Democrats and Republicans. I submit that the two sides vying for control are the entrenched political parties, and the rest of us that get just enough to placate while being wholly ignored.

  • by jellomizer ( 103300 ) on Monday April 28, 2014 @10:25AM (#46858853)

    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!

    • by alen ( 225700 )

      and why would another company want to buy these customers?

      • I love how people STILL assume that Comcast competes on a level playing field.

        I am sure there is leverage there. I am sure they have something to hang over the heads of the smaller providers/ISPs.

        Look for them to divest their rural Indiana holdings. They hate it here.

      • by jellomizer ( 103300 ) on Monday April 28, 2014 @10:48AM (#46859173)

        The smaller companies, tend to pick up the less profitable areas, because the big guys get them all. Think of it as an Easter egg hunt. The more aggressive stronger boys will often get all the easy to find eggs, leaving the little smaller kids, trying to find the harder to find eggs...

        However they usually end up with something so they are happy. The same thing with cable companies. If they can expand their range all the better. If they get lucky a particular area could start growing thus give them something more valuable. However more people who know their name the better.

      • That's why Comcast and Charter are creating a "new" company.

    • Indeed, from TFA:

      The divestments, mostly in the U.S. Midwest, would deliver about $19.5 billion in value to Comcast shareholders, the companies said.

      So yeah, they're "divesting" flyover states.

      • Like I said, they hate it here.

        They have spent very little money keeping their systems up in Indiana. They constantly oversell their services with push salespeople who don't know their product. Their local offices spend their days on the phone with angry hicks.

        In some ways I am fine with seeing the backside of Comcrap, but Charter has a pretty bad reputation itself.

        Fiber is supposed to go into my town... and this just wears my patience thinner...

      • Oh God, please let it be true. Deliver us from the Scourge of Comcast, and make haste unto thy busom of Charter.

      • Those of us in the flyover states can't wait to be rid of both Time Warner AND Comcast. Between Comcast's bullshit bandwidth capping and Time Warner's liberal use of the CCI "CopyOnce" flag, I don't want to have anything to do with either of them; to say nothing of the mutated twisted infrastructure wreck that combining the two would bring.

    • This also allows Comcast to absorb Time Warner while aligning their interests with Charter. It helps the continuing solidification of the industry into a cartel of a small number of businesses.

    • by Anonymous Coward

      It's just the wrong direction in which they offer to split themselves. They should be split between infrastructure and content, i.e. one company that runs the cables, another that brokers the TV deals, a third that runs the internet services, and possibly a fourth that sells their own content, possibly via one of the other content companies. The infrastructure company should also be required to offer their services to any other ISP at the same conditions.

    • by Xian97 ( 714198 )
      The first thing I thought of was that they would sell off the areas that were recently announced to have Google Fiber coming.
  • by borcharc ( 56372 ) * on Monday April 28, 2014 @10:26AM (#46858865)

    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 [].

    • I'm not a fan of Charters billing. Their bill has two items (cable, internet) so I have no idea what I pay for what, and when the bill creeps up there is no itemization to show why.

    • 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.
      • Actually, in a situation where a city authorizes a monopoly service, why aren't the people of that city consulted when that service is to change hands.

        Maybe they are consulted by consulting with the city council or commissioners, but we all know that's just as good as no oversight at all.

        You'd at least think there would be public hearing...

    • I bet you voted for Kodos too.
  • by Anonymous Coward

    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.
    • by gnupun ( 752725 )
      So if in two years cable and dsl rates go up because of this merger, blame the govt for reducing competition and promoting price gouging. This merger should not be approved.
    • I figured they would just sell the customers to Time Warner :-)
  • by penguinoid ( 724646 ) on Monday April 28, 2014 @10:28AM (#46858893) Homepage Journal

    I'm sure the people in question don't mind being sold to a different company.

    • by hAckz0r ( 989977 )
      Better if it were every other neighbour. That way there would have to a second cable company's cable in the ground and some actual competition in the neighbourhood. Satellite doesn't count as competition if what you are after is voip or Internet access. When you are the only game in town it doesn't matter how many subscribers your local monopoly has. Selling and buying any number of subscribers doesn't make any difference to the locked-in consumer.
    • As a former Charter customer, I have to say they are only slightly less evil and shitty as Comcast. There's a reason I went back to AT&T DSL. I have a very skinny pipe (officially 3 down and 1.5 up but closer to 0.75 down and 0.25 in reality) but the quality of service is decent and the Internet actually has close to the mythical 99% up time.

      Whereas my friends who are still on Charter, since it can actually handle streaming, have their Internet service cut out regularly (about an hour or two once
  • 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?
    • I'm sure that the TOS offers a way for this to happen outside of the customers' control. Even if not, they could just say, "Sorry, Mr. Comcast Customer, we're not longer servicing your address. If you would like to continue receiving cable service, please sign up with SpinCo."

    • They are selling their infrastructure which passes by said customers. The customers can choose to subscribe, or not. They don't really have another option.
    • by alen ( 225700 )

      usually one cable company is in a given market a lot of times due to expansion in the 90's some companies will have a town or part of a town where another company owns most of that general area

    • No they don't. The cable companies have a monopoly in each area. Comcast will simply sell off some minor operations in some locations to a new owner. That new owner will then focus of how to get back over $5200 per subscriber that just bought, as well as dealing with an infrastructure that Comcast knew they were getting rid of and might have stopped investing in. Guess where that money comes from.

      The choice those subscribers have is to stay and pay, go "free-air" and have access to a lot less programming a

  • by WPIDalamar ( 122110 ) on Monday April 28, 2014 @10:30AM (#46858909) Homepage

    Does this mean a cable subscriber is worth ~ $5000 to a cable company?

    • Sounds plausible to me. Keep in mind that many of those customers - especially in rural areas - have no other option for high-speed Internet, so the buyer is also receiving a near-monopoly.

    • That's about 3 years of billing on an average subscription. Given the nature of the business, that sounds about right. With a few exceptions, business tends not to look more than that into the future when it comes to financials.

  • by Jason Levine ( 196982 ) on Monday April 28, 2014 @10:32AM (#46858947) Homepage

    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.)

    • 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.)

      When was there ever competition? In the vast majority of service areas, cable (like telephone) is a monopoly with exclusive access to end-users granted by the local governmental authorities.

      Years back, the locals kept the worst of the monopoly abuses under a lid by regulating the cable outfits. When cable started serving up networking, the FCC took over and essentially deregulated the business, which is why the old ISP business is dead -- it's telco or cable today, or do without.

      • And even without the government franchise grant, it'd still be a natural monopoly. Once the first company to market has laid the cable and signed everyone up, it'd be near-impossible for a second to win over enough customers to pay for their own build. Laying cable is hugely expensive.

        • The economics is the real reason there is a de-facto monopoly. It's isn't a de-jure monopoly because another company could enter a franchise agreement with the municipality involved, it's just ridiculous to go into an area you know you are going to lose money in.

          An issue that might be a problem for any incoming cable company is not the local government franchise, but the licensing of the content (even ignoring who originates it.) Has that local television station signed an exclusive contract with the exis

        • by Belial6 ( 794905 )
          No. It is not. If it was a natural monopoly, there would be no need for cities to grant legal monopoly to existing cable companies. You would also not have companies like Google and Sonic trying to lay their own cable.
          • Google isn't planning to make money on their investment. It's more strategic for them. Faster internet promotes their other services, and undermines the ability of ISPs to extort money from them as they are for Netflix.

          • No. It is not. If it was a natural monopoly, there would be no need for cities to grant legal monopoly to existing cable companies.

            Then explain why there aren't multiple cable companies all over the place. The existing non-exclusive franchises would not prevent it from happening, so there must be some other reason.

            You would also not have companies like Google and Sonic trying to lay their own cable.

            Google have to lay their own cable because the existing cable technology is not sufficient to allow them the unfettered access to their own plant that they want. You don't imagine that Google wants to build expensive head-end plant and get only limited access to the limited bandwidth left over on current cable system

            • by Belial6 ( 794905 )
              What non-exlusive franchises?

              You just acknowledged that there are competitors that want to lay their own cable. Not only their own cable, but even better cable than what the current monopoly has. This is exactly the opposite of a natural monopoly.
              • What non-exlusive franchises?

                Every franchise I've known.

                You just acknowledged that there are competitors that want to lay their own cable.

                I'm sorry, what? No, they don't want to lay their own. They know that they can't make any money doing it. That's what keeps them from getting a franchise and doing it.

                Not only their own cable, but even better cable than what the current monopoly has.

                Those that want to "lay their own cable" are not cable television companies, they are companies like Google. And as someone else has already pointed out, they aren't doing it for the money, so the economic rules don't apply.

                This is exactly the opposite of a natural monopoly.

                Different company doing a different thing for a different reason, trying to avoid the fran

      • by Belial6 ( 794905 )
        There was no 'deregulation'. If it was deregulated, I could put in cable and start offering services as an ISP on my own cables. I cant do that because of regulation. 'Deregulation' usually means keep regulating, but do it in a way that lets the company screw the customers.
    • ...and get 7 billion out of Charter for their troubles.

  • 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.
  • 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.

  • 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.)
  • 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).

  • This attitude is only possible because of monopoly status. Remove their monopoly status and the market will self-correct.
  • by water-and-sewer ( 612923 ) on Monday April 28, 2014 @10:55AM (#46859255) Homepage

    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 I'm the king of Spain, I suppose I'm going to want to SELL the serfs living in lands held by Napoleon.

      If Comcast gets rid of people who HAVE A CHOICE to the competition -- they can just raise rates where there is no competition and overlap.

      Yeah this is bullshit and the emperor has no clothes but the media and the bought out government are all there to tell the King of Comcast that he looks very regal in his birthday suit. It does not matter that anyone paying attention knows this is a bogus deal to screw

  • by bobbied ( 2522392 ) on Monday April 28, 2014 @10:59AM (#46859313)

    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.

    • I see a Monty Python skit here, Comcast forms the new company and they send out their agents in chain mail; "Bring out your pensioners, bring out your pensioners!" They throw all the older workers in the new "Omega Righteous Liabilities inc."

      "But I'm not dead yet!"

      The club him and continue dragging the cart to the next lucky employee.

      • Just before they come to the troll who asks "How much liability have you assumed with all these bodies?"

        "Why... I don't know.. "


  • 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 usag

  • 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.

  • 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 t

  • 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?
  • Spin off the content part of the business.

  • 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!.

  • They'll just end up buying Charter in a couple years anyway.

  • 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 ma

Karl's version of Parkinson's Law: Work expands to exceed the time alloted it.