Even since Comcast made its intention of merging Time Warner Cable public there has been a lot of debate about this. Several public advocacy groups have come out against the merger and even internet media providers like Netflix have publicly opposed it. Comcast also has to jump through regulatory hoops before the merger is approved and in a bid to secure that, the cable provider has decided that it will dump 3.9 million of its customers if the merger goes through.
Under the agreement Charter Communications will acquire approximately 1.4 million existing customers which would make it the second largest cable operator in the U.S. The remaining 2.5 million customers will be absorbed by a new publicly traded cable provider spin-off that will be created by Comcast, Charter will get a 33 percent take in the spin-off.
Comcast claims that this move will reduce its post-merger subscriber base to less than 30 percent of the entire TV market, “while maintaining the compelling strategic and financial rationale of its proposed merger with Time Warner Cable.”
By agreeing to dump its customers Comcast is willing to show merger opposers that their concerns about an anti-competitive cable market are overblown. It remains to be seen though if this move changes their mind. Comcast will retain its 3.9 million customers if regulatory approval is not granted for its merger with TWC.
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