Cable TV operators face $5 billion price war with satellite companies

By Jeff GattisAssociated PressJanuary 28, 2017, 10:20:37The cable operators that compete with satellite providers say their products are cheaper and better than those offered by those who dominate the satellite business.

They say they don’t want to lose customers to satellite providers and to compete with them on price, but they also say the competition is growing and could hurt them in the long run.

That could be a factor in the merger of Charter Communications Inc. and Time Warner Cable Inc.

The cable companies are seeking approval from the Federal Communications Commission to combine, a move that could put them in a better position to fight off rivals, like Comcast Corp. and AT&T Inc.

That merger is also raising questions about competition in a market that is seeing a steady increase in broadband and cable services, as the two companies seek to expand their reach.

In a regulatory filing last week, Charter Communications said it plans to combine with TWC, a company it acquired in February for $45.4 billion.

The merger is expected to close this year, after which the companies would combine with another cable operator, Spectrum Communications Inc., for a combined $65.7 billion.

Comcast said in February it planned to merge with Charter and TWC to create Spectrum.

In the merger announcement, Charter said it would focus on expanding its own network of fiber-optic lines to rural areas, while TWC would expand its footprint in residential markets.

Both companies are fighting against an explosion in Internet service, which has helped push prices down for most customers.

In an interview on Friday, TWC President and CEO Michael Powell said the merger would provide better value for customers and would create an opportunity for competition among cable operators.

But he added that Charter’s proposal would increase costs for Charter and would threaten its position in the cable market.

“We are trying to build a market,” Powell said.

“We are not just building a competitor, we are building a business model that gives us more flexibility and the ability to compete for customers.”TWC said it’s looking for a combination of smaller companies with a combined revenue of between $300 million and $500 million and between 1,000 employees and will enter into discussions with cable operators about possible mergers.

“This is a strategic decision that we are making to invest in our future and to provide the best possible service to our customers,” TWC Chief Executive Officer David Levy said in a statement.

“The combination of Charter and Spectrum gives us the flexibility to be the best provider for our customers.”

In addition to the merger, Charter and Comcast also are seeking to merge.

Comedy Central is also looking for an acquisition, according to people familiar with the talks.

The companies would create a new, standalone TV service that would be part of a bundle of video streaming services.

Charter said the company would be focused on its core broadband services, while Comcast said it will focus on its video streaming.

The merged companies will be able to take advantage of a provision in the Telecommunications Act that allows them to sell their own video services.

The deal could result in Charter becoming a larger cable operator and TWX a smaller satellite company.

Both cable companies said they are working to ensure the deal does not impact their ability to offer their services and to protect the privacy of customers.