Charter/TWC/BHN Close Could Come in Mid-May
Charter Communications hopes to close on Time Warner Cable and Bright House Networks "within a few days" of the California Public Utilities Commission's expected May 12 vote, if the CPUC approves it and the FCC has given approval by then, CEO Tom Rutledge said during the company's Q1 earnings call. TWC CEO Rob Marcus, in a separate earnings call also on Thursday, said the company is "optimistic the transaction will close sometime next month."
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Following that close, an all-digital transition at TWC and BHN will be a major priority that could take until the end of 2018, Rutledge said. At the Charter/TWC/BHN close, the company will pause any digital rollouts, restarting that process with two-way set-top boxes and also new digital pricing and packages, Rutledge said. He also said it plans to roll out new pricing and packages in parts of the company that already are digital. Most Charter markets will be on a cloud-based user interface by the end of 2016, and the time frame for bringing BHN and TWC onto that interface still is being worked out, he said. He also said the company has to work out the different set-top pricing model TWC currently has. Rutledge declined to talk about the FCC's proposed requirement that New Charter overbuild 1 million broadband connections that overlap in markets served by other broadband providers (see 1604250039).
Charter saw Q1 revenue up 7.1 percent, to $2.5 billion from the year-ago quarter, largely on Internet, video and commercial growth, the company said. TWC finished the quarter with revenue at $6.2 billion, up 7.2 percent. TWC's Marcus said investments the company made even while going through possible deals with Comcast and then Charter resulted in a more-reliable network and improved customer service that then led to that revenue growth.
TWC Max, the company's digital conversion/broadband speed upgrade, was 50 percent complete as of the end of the quarter, with another quarter of TWC's footprint underway, Marcus said. He also said the company's IP TV trial in New York City was seeing good early customer feedback. He also said the overall cable industry trend toward operating without customer premises equipment like set-tops reflects an industry no longer "much less responsive" to consumer demand, and video via IP "avoids many of the pain points that historically have marked our business."
When asked about the cable industry future of usage-based pricing and paid peering and interconnection, Marcus said that most of its broadband customers opt for the unlimited plan points to "a value proposition ... that's exceptionally compelling." While FCC-proposed Charter/TWC/BHN conditions include no usage-based pricing for seven years, he said, "it's hard to know what others in the industry will do." Interconnection as a revenue source "has always been overrated," he said.