Rutledge: Bright House Buy Could Help Comcast-TWC

Says Deal to Lower Cable Giant's Attributable Customers
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Charter Communications CEO Tom Rutledge said that its pending $10.4 billion acquisition of Bright House Networks is contingent on Comcast’s $67 billion deal to purchase Time Warner Cable, but the Charter CEO said his deal could help push the larger transaction through some murky regulatory waters.

Rutledge admitted that if the Comcast-TWC deal does not win approval, that would make the Bright House deal a no go. But he said that he is confident the larger transaction will win approval and said that by buying Bright House, Charter effectively lowers the attributable subscribers to the combined Comcast, TWC to about 29 million customers from the 31 million subscribers previously expected.

“We think the [Comcast-TWC] deal is likely to close and it is more likely to close because it solves the attribution problem for Comcast-TWC,” Rutledge said on a conference call with analysts discussing the deal. “It improves the assets under the control of Comcast.”

While the FCC has been more concerned with the concentration of broadband customers in the combined Comcast-TWC, the Bright House deal would effectively lower that bar as well, by about 1.9 million subscribers.

Some analysts have dropped their odds that a Comcast-TWC wins FCC approval as low as 50-50 in the past several months, and the FCC stopped the 180-day shot clock for the approval process on March 13 to give a federal appeals court time to rule on a challenge to protective orders related to the review of the mergers.  As a result, Comcast said it expects the deal to be approved by mid-year, instead of early in the year.

Charter also has several pending sales, swaps and spins with Comcast and TWC that would add about 1.4 million additional subscribers to its coffers.  Those deals, also contingent on the larger transaction being approved, could be consummated between 30 days and 45 days after the Comcast-TWC closes.

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