Comcast buys Time Warner Cable for $45 billion

Ah cable companies.

You love ‘em, you hate ‘em, so many of us can’t live without ‘em.

How would we watch and record all of our favorite shows without that trusty cable company DVR ready and able to do our bidding? How would we stay current on favorite shows – even online you have to wait anywhere from one to seven day for new episodes to be released online after airing on television.

Cable is simply a way of life for millions of people – and millions of those millions are about to be affected by a huge merger in the industry.

Comcast is buying out Time Warner Cable Company.

The Buyout Details

There has been speculation for some time between all of the biggest names in cable to see where this particular cookie would crumble. Time Warner Cable was up for grabs, and there were some bidders ready to make a deal.

The first out of the gate was Charter. Charter is the third largest cable provider, and actually slightly smaller than Time Warner Cable. Charter offered the equivalent of $1.30 per share of Time Warner Cable, but the board found that “grossly inadequate” and rejected the offer.

Time Warner Cable then proposed a price closer to $1.60 per share, but Charter wasn’t playing.

Enter Comcast.

The largest cable company in the United States, Comcast currently serves 23 million television subscribers. Comcast proposed – and Time Warner Cable accepted – a deal to pay $159 per share of the company. This deal would scoop up Time Warner Cable’s 11 million subscribers, making Comcast the absolute largest provider of cable services in the country.

It’s making people wonder if Comcast is getting a bit ahead of itself.

Is Comcast a Monopoly?

Years ago there was a legal cap on cable companies. No cable company could “own” more than 30 percent of the market. With Comcast buying out Time Warner Cable, the joint subscribers will be at least twice that percentage.

If we were living in 2005, Comcast would be shut down in court.

No deal.

But in 2009, after Comcast made an appeal, the federal courts threw out the cap on the marketplace. There’s no legal limit to how many subscribers Comcast can have, but that doesn’t mean the federal government isn’t watching.

One cable box to rule them all.

It might sound like a good plan if you’re working for Comcast, but it’s a little unsettling for the justice department in D.C.

The head of the anti-trust division, William Baer, has publicly said that his department will be keeping an eye on the merger and has expressed concerns about the benefits for consumers from the union of the two companies.

So far Comcast is sitting pretty, however, despite the scrutiny.

It helps, of course, that the chief lobbyist for Comcast, David Cohen, happens to be close to the President. Close enough, in fact, to score an invitation to the White House State Dinner to honor the President of France.

It’s enough to make you wonder if Comcast will face any hassles over the deal at all.

On the Plus Side

Consumers may be watching this merger with wary eyes, but there could very well be some positives that come through it all. Currently Comcast is known for better equipment and service than Time Warner Cable.

This means that former Time Warner Cable customers may find themselves with improved quality.

The combined company is also large enough to have major sway with companies like Disney and the owners of CNN and HBO. This may also help influence subscribers.

Finally, there is expected to be significant cost savings between the two companies as efficiencies rise. This may result in lower prices, or at the very least more services for the current billing rates.

And rumor has it that one of the biggest services of all to come to Comcast in the very near future is computer-based show abilities to compete directly with Amazon and Apple.