Charter deal seeks to keep cable consolidation on track
By The Associated Press, Associated Press
May 26, 2015 12:02 AM CDT
This April 1, 2015 photo shows a Charter Communications van in St. Louis. Charter Communications is close to buying Time Warner Cable for about $55 billion, two people familiar with the negotiations said Monday, May 25, 2015. (AP Photo/Jeff Roberson)   (Associated Press)

Charter Communications Inc. is said to be nearing a deal to buy Time Warner Cable Inc. for $55 billion. It would be the latest in a series of deals that have reshaped the cable-TV industry.

Q: WHAT IS DRIVING THE DEALS IN THE CABLE INDUSTRY?

A: Cable companies are bulking up to survive as the number of cable and satellite TV subscribers slips — more consumers are "cutting the cord" — and competition from streaming video rises, thanks to rivals such as Netflix Inc. They also must fight TV channels over the cost of programming.

Q: WHAT HAS ALREADY CHANGED?

A: Verizon's FiOS is trying smaller, customizable TV bundles. HBO has launched an online version of its content, HBO Now, that doesn't require a cable TV subscription.

Q. WILL CHARTER SUCCEED WHERE COMCAST FAILED?

A. Consumer advocates fiercely opposed Comcast Corp.'s $45 billion takeover bid for Time Warner Cable, which would have married the nation's two biggest cable providers. Competitors opposed it. Regulators worried that the combination would be too dominant in high-speed Internet service and might undermine the streaming-video industry that is changing TV viewing. Charter will argue that its $55 billion tie-up with Time Warner Cable won't create as large a cable company and should not raise the same level of concern.

Q. WHAT OTHER DEALS ARE OUT THERE?

A. Charter is trying to buy Bright House Networks, a small cable provider. France's Altice S.A., said to be a failed bidder for Time Warner Cable, last week bought a controlling stake in Suddenlink Communications. And AT&T, long synonymous with phones but now involved in Internet and more, is paying $48.5 billion for satellite-TV provider DirecTV, which competes directly with the cable guys.

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