Just a month after Comcast halted a $45 billion merger deal with Time Warner Cable, Charter Communications has made a $55 billion bid to purchase TWC.
The mega-merger would create a company that serves 29 million consumers in 41 states.
So, if the proposed deal gets the thumbs up from shareholders and the Federal Communications Commission, what will it mean for consumers?
In short, it doesn’t sound that great.
Charter boasts that the merger will result in faster, cheaper broadband for consumers as well as improved customer service. Tom Rutledge, president and CEO of Charter, said in a statement:
With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large-, small- and medium-sized business services marketplace.
It’s hard to say if the promised improvements in customer service would come to fruition. After all, both Charter and TWC rank poorly in customer satisfaction surveys. I’m a Charter customer, and I don’t have anything positive to report about its customer service.
As for cheaper service, over the long run “critics say the collective weight of such deals may mean higher prices for subscribers,” said The Associated Press.
Lawrence Sanders, a professor of Management Science and Systems with the University of Buffalo’s School of Management, told WBFO that subscribers’ technology may be improved as a result of the acquisition, but their pocketbooks won’t see a break.
“In the short run, I don’t see any silver lining for consumers,” says Sanders. “I doubt that the merging of Charter and Time Warner will result in lower costs for consumers. That’s my own insight in this situation. I don’t think prices are going to decrease. I think there’s a lot of emphasis in terms of increasing their margins, their profitability.”
Sanders said the merger would make Charter more competitive with Comcast.
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What do you think of the proposed Charter-Time Warner Cable merger? Share your comments below.
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