US cable TV: Adelphia divvied up
US cable giants Comcast and Time-Warner Cable have announced that they have won the bid for the assets of Adelphia. Adelphia, fraud-ridden and bankrupt, was the fifth largest cable system in the US. Its subscriber base and assets, mostly located in rural areas, was sold to the two companies for a joint bid of around $16 billion.
Comcast is already the US's largest cable TV company, with 21 million subscribers, and will add 2 million more with the Adelphia deal. Time-Warner, the #2 cable company, with about 11 million customers, stands to add 3 million new subscribers to its rolls. At the same time, Comcast will give Time-Warner full title to several major cross-ownership deals between them, simplifying life for both comapnies. For Comcast, the deal is a simple swap with no tax consequences.
For both companies, it stands to give them even more thorough domination of the cable TV market. Both companeis are suing their cable dominance to build up programming, high-speed computer services, on-demand video, and VOIP telephony. In those areas (except for programming), they are gearing up to do battle with phone companies like Verizon and SBC.
The two companies beat out a bid from rival Cablevision, the #6 cable company. That company, which has its own issues, has announced that it is droppinbg its unprofitable satellite TV system called Voom.
