Comcast takes another PR hit as plans to abandon Detroit post-merger come under scrutiny

As if Comcast (NASDAQ: CMCSA) needs any more public relations headaches as it tries to gain regulatory approval for its $45 billion purchase of Time Warner Cable (NYSE: TWC), the conglomerate's plans to abandon that most forlorn of Midwestern cities, Detroit, has now come under scrutiny, too.

As part of its plan to shed around 2.5 million cable subscribers in the Midwest and Southern U.S. and become, in its words, an "urban clustered cable company" with substantial customer bases in New York and L.A., Comcast intends on ceasing its Detroit operations.

Should the TWC buy gain regulatory approval, cable subscribers formerly under the Comcast umbrella in Detroit, Minneapolis and other Midwestern cities would be served by Comcast's joint venture with Charter Communications (NASDAQ: CHTR), GreatLand Connections.

Local Detroit lawmakers aren't so sure they like the idea.

"It's not helpful when a company like that leaves," said James Fouts, mayor of Warren, which borders Detroit, told Bloomberg.

"We don't have the answers we need," added Ron Styka, an elected trustee who oversees cable services in Meridian Township, Mich., a town served by Comcast about 80 miles west of Detroit.

As Bloomberg notes, GreatLand would start out with $7.8 billion in debt, which is about five times its earnings before interest, taxes, depreciation and amortization (EBITDA). With Comcast's debt ratio coming in at around two times EBITDA, Detroit-area lawmakers are concerned that they'll be swapping in a more debt-ridden, less-flexible operator.

For more:
- read this Bloomberg story
- read this MLive story

Related links:
Comcast home invasion lawsuit exposes risks for home automation, security service providers
Comcast, TWC lag behind in latest J.D. Power customer satisfaction survey
Comcast taps product exec Herrin to fill new customer service SVP role

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