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Bright House 'Complicates' Comcast Merger, May Spike Prices
by Karl Bode 05:46PM Monday Aug 18 2014
The Wall Street Journal notes that Time Warner Cable's existing relationship with Bright House Communications complicates Comcast's proposed acquisition of Time Warner Cable. Bright House is currently its own company, but Time Warner Cable has an ownership interest and historically handles programming, some engineering and technology acquisitions for the company (they even historically shared the "Road Runner" branding).

The catch? If Comcast buys Time Warner Cable and takes over programming for Bright House, they'll derail divestment promises intended to calm regulator concerns about their massive size:
quote:
To assuage concerns about its size, Comcast said when it struck the TWC deal in February that it would divest itself of subscribers to keep it below 30% of the pay TV market. It subsequently reached agreements to divest itself of 3.9 million subscribers across the country, more than it originally proposed.

If Comcast continues handling Bright House's programming negotiations, Comcast would be buying programming for 32 million customers, or nearly 32% of the pay TV market, which SNL Kagan estimates to total 101 million homes. It would extend Comcast's influence in broadband to the 1.9 million Internet customers served by Bright House.
Comcast's getting around this by insisting that even though they'd be in charge of programming and some technical aspects of Bright House, the Newhouse family would still technically be in charge:
quote:
In the June filing, Comcast noted that even assuming "existing contractual arrangements remain in place without alteration," the Newhouse family would still manage Bright House's systems, not Comcast. Therefore Comcast's total number of "managed" subscribers would still remain below 30% of the pay TV market.
In short, if regulators approve the deal with Bright House included Comcast's power will be greater than even forecast. If they block that aspect of the deal, Bright House is suddenly tasked with programming negotiations as a much smaller company with less leverage, driving up costs for Bright House users.


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