With Comcast trying to use its sizable market power to leverage a better franchise agreement in Vermont, Wired offers a retrospective on the deal that turned both Comcast and Charter Communications into the industry monoliths they are today.
It’s an interesting tutorial for those who are relatively new to the business. For those industry denizens who were around, Wired’s table setting is also an instructive reminder.
In 2006, Comcast and the erstwhile Time Warner Cable closed on a deal that called for them to pay $17 billion for the imperiled Adelphia Cable.
TWC received Adelphia’s systems in the Carolinas, swapping its systems in Minneapolis, Memphis and Jackson, Mississippi for Comcast systems in Los Angeles, Dallas and Cleveland. TWC, which was acquired by Charter Communications last year, became the largest cable operator in Los Angeles and New York.
Comcast, meanwhile, added hundreds of thousands of new customers in Washington, D.C., and Boston.
RELATED: 10 years of consolidation in cable: The rise of Comcast, TWC, Charter, Cox and Cablevision
“In the decade since the Adelphia deal and the swaps, both companies have gone from strength to strength: Comcast is the biggest ISP and pay-TV company in the country, as well as one of the handful of major U.S. media content companies,” Wired’s Susan Crawford wrote. “Time Warner Cable, now branding itself as Spectrum after its acquisition by Charter, is similarly enormous.”
As Crawford also noted, Comcast acquired its Vermont systems from Adelphia, with the condition that it extend broadband into rural areas. With the new franchise agreement, Vermont now wants Comcast to come through on that pledge. But Comcast is currently suing Vermont’s Public Utilities Commission, claiming the state’s current franchise-agreement demands are unfair.