SBC Communications Inc. confirmed Thursday that it signed a deal to
sell its 310,000-subscriber Ameritech New Media cable unit to cable overbuilder
The deal -- which sources familiar with the negotiations said was between $200 million and $300 million -- would make the Denver-based overbuilder roughly the No. 13 domestic MSO. SBC's Americast-branded properties pass about 1.5 million
homes in Michigan, Ohio and Illinois.
The selling price would be only about $1,000 per subscriber, or about one-quarter of what SBC had been seeking in shopping the systems, an MSO executive
familiar with the deal told Multichannel News.
The sale requires local franchise approvals, which could take months.
The parties would not disclose the terms.
Multichannel News first reported the pending transaction in print May 14.
In a press release, SBC senior executive of corporate development James Kahan said: "WideOpenWest is a well-respected, customer-focused company with a strong
commitment to providing the same type of high-quality programming and customer service subscribers have come to expect from Americast."
SBC has spent years shedding both the cable assets it built -- such as a system in Richardson, Texas -- or those it bought from such sellers as telcos Pacific Bell and Southern New England Telecommunications Corp. or MSO Hauser Communications Inc.
SBC bought Ameritech Corp. in 1999 and put its cable systems on the market more than one year ago.
WOW president Mark Haverkate -- an industry veteran who helped to launch RCN Corp. overbuilds in Boston and San Francisco -- said adding high-speed data to the Americast-branded systems would be "our top priority."
"None of these systems provides Internet access, so it's a wide open opportunity for us to go in there and offer that product," he said. "That will make us a cash-flow-positive company, rather than a cash-burning company."