Time Warner Cable Wisconsin customers service

Charter to buy Time Warner Cable, would dominate Wisconsin market

Rick Barrett thumbnailBy of the Journal Sentinel

An acquisition of Time Warner Cable by Charter Communications could result in faster Internet speeds and more program choices for consumers, but it could come at the expense of hundreds of jobs in Wisconsin.

Tuesday, Charter said it was buying Time Warner Cable for $55.33 billion, a move that would combine the second and third largest cable providers in the nation to compete against market leader Comcast Corp.

The deal comes a month after Comcast, which owns NBC Universal, walked away from a $45.2 billion bid for Time Warner Cable, the No. 2 cable company, after intense pressure from regulators. Time Warner Cable had chosen the Comcast deal and rejected a $38 billion hostile offer from Charter in early 2014.

Time Warner and Charter are the two biggest cable companies in Wisconsin, covering much of the state with television and Internet service.

Charter has about 1, 900 employees in Wisconsin, with large offices in Madison and Fond du Lac. It provides cable and broadband services in many communities including West Bend, Fond du Lac, Beloit, Janesville, Madison, Sheboygan, Eau Claire, La Crosse, Stevens Point and Wausau.

Time Warner Cable has about 2, 000 employees in Wisconsin, including hundreds at its offices in Milwaukee and Appleton. The company's customer service center in Appleton fields calls from other states as well as Wisconsin.

Charter also plans to acquire Bright House Networks, the sixth largest cable operator in the nation, for $10.4 billion. Charter, Time Warner Cable and Bright House, combined, would be known as New Charter.

"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. New Charter will capitalize on technology to create and maintain a more effective and efficient service model, " Charter President and CEO Tom Rutledge said in a written statement.

Combined, the companies could lower their costs by sharing some operations and having a smaller workforce, according to industry experts.

Hopefully some of the savings would be passed on to consumers, said Abdur Chowdhury, a Marquette University economics professor.

"I think it's good for consumers. We are not going to see an immediate change in our cable bill, but maybe a year down the road there will be some changes, " Chowdhury said.

In Charter's earlier attempt to acquire Time Warner Cable, it said the company was a "turnaround project" that would be better off in its hands.

That deal would have resulted in lower programming costs, less corporate overhead and better customer service, according to Charter.

Under the previous deal with Comcast, to appease regulators and lawmakers, Time Warner Cable would have spun off about 1.4 million customers to Charter — including all of the estimated 200, 000 households that subscribe to Time Warner in the 10-county Milwaukee area.

Now, once again, it looks like Charter will gain control of Time Warner Cable and much of Wisconsin's market, said Barry Orton, a telecommunications professor at the University of Wisconsin-Madison.

One of the biggest impacts could be fewer jobs as the combined companies eliminate duplication of services and operations.

Time Warner and Charter, as one company, wouldn't need as many people in areas including customer service, billing, marketing and management, according to Orton.

It's hard to imagine that the combined companies would keep all of the customer service centers intact, Orton said.

There has been a wave of consolidation in the cable industry as providers seek to control costs and offset the loss of television subscribers.

Charter, combined with Time Warner Cable and Bright House, would have nearly 24 million customers, compared with Comcast's 27.2 million. It also would lag AT&T, whose pending deal with DirecTV would give it 26.4 million television customers and tens of millions of Internet and wireless phone customers.

Combined telecoms have more bargaining clout with broadcasters and video content providers, in addition to finding cost savings in other areas.

"But those savings go to the company, not consumers. They pocket that difference, " Orton said.

"I don't see savings for consumers in this deal, and I don't see job growth in the state. I see job losses, " he added.

Whether government regulators approve the Charter deal after quashing Comcast's bid for Time Warner Cable remains to be seen. The Comcast deal would have given the company more than half of the country's high-speed Internet subscribers, which the government feared would undermine online video competitors.

Charter would have less than 30% of those broadband customers, the company said Tuesday.

"We're a very different company from Comcast, and this is a very different transaction, " Rutledge said in a conference call.

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