My last post took you down the journey of how TWC and Charter came to be separately and now how they hope to become the New Charter. The FCC is in the reviewing process of their acquisition which means it is time to move on to why this deal is more likely to go through than Comcast.
According to Wall Street Journal analyst, Jonathon Chaplin the reason Comcast-Time Warner Cable was a problem for the government was because they were going to have a dominant share of the national broadband market.
The combined TWC, Charter and Bright House corners roughly 24% of the market; the combined Comcast and TWC would have made up more than half of all households with high-speed broadband access even with the spin-off company known as the Greatlands.
The FCC felt that was too much power for one cable MSO.
It’s All About the Content
There is no question: Comcast is the largest US-based Cable MSO. This gives Comcast strength when negotiating for content providers. Keeping customers happy with new content will only strengthen their position in the industry.
Charter is aware that consumer viewing is changing. In order to stay competitive Charter must keep pace with technology and content. Doing so will attract new customers and ensure current customers have the products and services they want to stay. By becoming larger, Charter puts itself in the same negotiating position as Comcast. This gives potential customers options when choosing a company that will provide services.
This strategy could be seen as a benefit to the consumer and staying within the net neutrality laws. Showing a commitment to embrace recent net neutrality changes could position Charter as a leader in providing customers access to content, forcing its competitors to follow them.
Consumers can expect to receive better technology, faster broadband, and additional content and programming for low income households while still obeying net neutrality rules. This allows consumers to get the content they want with competitive pricing for that service. Consumer behavior is changing, and the New Charter has the ability to be on the consumer’s side.
This again plays in the advantage of Charter because new consumers could come on board from other providers based on the options and prices available. The FCC wants to see the best interest of the consumer and the rules are being followed; based on what we know, Charter and TWC have a good chance to show consumers they are ready to take control.
Send us your thoughts to Kelly.Potter@mintek.com on which way you think the merger will sway.