Cable's Timely victory
TW, Comcast find happy ending with Adelphia story
Time Warner Cable and Comcast, the country's two largest operators, claimed victory in their $17.6 billion bid to buy bankrupt Adelphia. The two will divvy up some 5.3 million customers.
TW Cable, which will be spun off as a separate, publicly traded company, will grow from 10.9 million customers to 14.4 million nationally, giving it a lead over satellite biggies DirecTV and EchoStar. Comcast will pick up 1.8 million Adelphia customers, bringing its total to 23.3 million.
TW Cable, the exclusive provider in Manhattan, thus also will control 70% of the nation's second-largest TV market: Los Angeles. It's set to pick up Adelphia's 1.1 million subs in the area and some 850,000 Comcast customers.
That should make a big impact on L.A.'s fragmented cable market, which has a history of cable companies that were unwilling to upgrade -- leading to dissatisfied customers. Many of them have been defecting to satellite. TW Cable vows to woo those subscribers back. TW Cable's biggest rival in L.A. will be DirecTV, which has been feasting on Adelphia's demise by grabbing up the cable operator's customers.
Adelphia covers about 40% of the L.A. market, but its service has suffered with the company's descent into bankruptcy.
TW Cable will likely offer aggressive pricing to compete with DirecTV. Also, it could have an advantage once it's able to offer telephone service in L.A. on a widespread basis. Another advantage over satcasting: high-speed Internet.
"It's an opportunity to consolidate that market for the first time," Time Warner chair-CEO Richard Parsons says.
"It's not only going to generate revenues, it is going to be a real advantage to Los Angeles consumers who haven't had the opportunity of having a quality provider."
TW Cable plans to spend $650 million over the next few years upgrading Adelphia systems across the country, including in Cleveland, Dallas and Buffalo.
