Time Warner Cable CEO Says Merger with Comcast is a "Dream Combination", Will Increase Innovation
March 12, 2014 2:37 PM
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He's also confident the deal will close
While some remain unsure of what Comcast's acquisition of Time Warner Cable (TWC) will mean for the industry, TWC's CEO has no doubt the deal between both companies is a "dream combination."
, TWC CEO Rob Marcus said the merger will mean increased innovation and efficiency in the cable industry.
“Look, I have every confidence that this deal is going to close. The logic of the deal is so compelling. I really don’t see anything undermining that,” said Marcus.
Not everyone shares that same point-of-view. Some worry that the merger will result in reduced competition, poor customer service, less innovation and higher prices for customers.
These worries stem from analyst predictions that Comcast and TWC's combined company would control about one-third of the U.S. broadband market.
But Marcus dismissed the negatives, saying that Comcast and TWC don't directly compete in any markets -- hence, competition would remain unchanged. He also defended the merger from accusations that customers would pay more in the end.
“I find that whole line to be totally ironic given the experience we’ve all had over the last dozen years, where (programming) costs have risen faster than the cost customers will bear," said Marcus.
TWC is raising prices on its own before the Comcast acquisition, saying it's offering more "customer friendly" cost increases by upping their bills once a year instead of as much as three times per year.
Comcast confirmed its
acquisition of TWC for $45.2 billion USD
in mid-February. It's set to be an all-stock transaction.
The deal, which should be completed by the end of 2014 (after approval by stockholders and regulators, of course), will give TWC investors 2.875 Comcast stock for each of their shares. TWC shares are valued at $158.82 a piece.
TWC shareholders will own about 23 percent of Comcast’s common stock, and the press release said Comcast plans to buy back an additional $10 billion of its shares.
The deal will up Comcast’s free cash flow per share and produce savings of about $1.5 billion. The overall acquisition values TWC at at about $69 billion including net debt.
It was revealed yesterday that Comcast used its political action committee to
pay millions of dollars in lobbying
, which paid many lawmakers responsible for overseeing the acquisition. The company even made donations to charities in an effort to put itself in a favorable light.
Comcast reportedly gave 15 of the 18 members of the Senate Judiciary Committee as well as 32 of the 39 members of the House Judiciary Committee some type of compensation or donation. Both committees are due to partake in hearings regarding the Comcast deal.
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RE: Customer friendly?
3/12/2014 9:24:20 PM
Actually, most HDTVs can decode unencrypted QAM cable broadcasts. The problem is several cable companies only show the local channels (what you could get with an OTA antenna) unencrypted. They encrypt the "everyone gets this" channels like Nat Geo, CNN, etc., making your TV's built-in tuner useless. You only get the same channels you could get with an antenna, and the antenna picture would probably be better anyway since it's not going to be compressed as heavily.
The FCC (or maybe it was the FTC) stepped in here and required cable companies to provide cablecards. These are standardized digital decryption cards you can plug into any cablecard STB. The STB uses the card to confirm with the cable company that your subscription is legit, and to decode the encrypted channels. Otherwise it acts just like a STB because it is one. In fact I've noticed the STBs provided by some cable companies are just cablecard STBs with a cablecard installed.
The monthly fee on the cablecards is a lot lower (typically $3.99/mo or $4.99/mo). This allows you to buy your own cablecard-ready set-top box, and plug it in. Some of the networked tuners even allow you to stream multiple channels over your LAN using a single cablecard (it's only used to confirm subscription and to decrypt - not to decode the TV signal into video). So if you have a lot of TVs this can be a much cheaper way to get them all cable TV service in the long-run. You pay a one-time cost for a single networked cablecard box, and a few streaming decoders to hook up to each TV, instead of a separate cablecard STB to each TV and multiple cablecard rentals, or a monthly fee for a separate STB to each TV. (One caution with the networked streamer type boxes is they don't work if the cable company sets the "do not copy" DRM flag in the video. I know at least one cable company does this for
even if the original broadcast is not flagged "do not copy". Ask online for the experience of others on your cable provider using cablecards.)
All the cable companies in the U.S. are required to offer it by law, so look into it if you're being charged excessively for STBs and remotes.
RE: Customer friendly?
3/12/2014 11:04:37 PM
That's all mostly true, however most of the larger MSO's have now implemented something called switched digital which rearranges the channel bandwidths to create new spots for internet channels, on demand, or more HD stuff. Problem is the old school cable card stuff including Tivo boxes don't work with switched digital. To stay legal the cable co's are "supposed" to provide a separate switch digital tuner box, but now you got yet another box and the guides and consumer DVR's don't always play nice with each other. Really the whole cable card thing has sorta turned into a fiasco.
The MSO can charge rental for the card, but not more than what a normal DCT would be. The only real savings to be had is when you consider the savings versus HD boxes and mainly DVR's since most charge 15 or more for those. The only reason I'd ever go the cable card route would be if I was setting up one of those Ceton 4 tuner cable card media deals. It varies on the company, but you do miss out of a decent amount of free on demand content because the settop box (DCT) is required to get the on demand stuff and guide that the company pushes out.
The MSO's all hated the cable card setup and sometimes I think they are doing their best to legally make them useless...and at the least run TIVO out of business.
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