Tag Archives: twc

Charter Stock Falls; Digital Realty Up On S&P 500 Add, Equinix Deal

Charter Communications ( CHTR ) stock fell Monday after the soon-to-be No. 2 cable TV firm was not added to the S&P 500, as some analysts and investors had expected, following the final approval of its Time Warner Cable acquisition. Standard & Poor’s announced late Friday that Digital Realty ( DLR ), a data center operator whose stock has been rising of late, would replace Time Warner Cable in the S&P 500 . Digital Realty will take TWC ‘s place on the index after the close of trading on Tuesday. Charter expects to close its purchases of Time Warner Cable and Bright House Networks on Wednesday, after gaining the final regulator OK on Thursday. It will then become the No. 2 cable company, behind Comcast ( CMCSA ). Equinix ( EQIX ) early Monday announced that it will sell eight European data centers to Digital Realty for $874 million. Regulators required Equinix to divest some assets in approving its acquisition of Telecity. The eight data centers consist of five in London, two in Amsterdam and one in Frankfurt. Shares of Digital Realty, which announced an equity offering to fund the Equinix deal, were up 2.5% early Monday, near 96 and touching an all-time high for the sixth day in the past eight trading days. Digital Realty stock is up 25% this year. Equinix stock was up a fraction early Monday. Charter stock was down nearly 4% in early trading in the stock market today , near 206. California regulators last week approved the Time Warner Cable ( TWC ) deal, the final hurdle to Charter’s makeover. Liberty Broadband ( LBRDA ) will own about 18% of the new Charter, while privately held media firm Advance/Newhouse will own about 13.5%.

John Malone Avoids FCC Conditions With Charter, Unlike Comcast-NBCU

Federal regulators opted to place no conditions related to John Malone’s sprawling media and telecom holdings in approving Charter Communication ’s ( CHTR ) acquisitions of Time Warner Cable ( TWC ) ( IBD ) and Bright House Networks. California regulators are expected to approve Charter’s deals as soon as Thursday, the final hurdle to Charter’s makeover. Charter will leap to No. 2 in the cable TV industry, behind Comcast ( CMCSA ). Comcast owns NBCUniversal and NBCU-related conditions that the FCC imposed on Comcast in 2011, which are set to expire in 2018. NBCU’s assets include the broadcast TV network, cable channels and a movie studio. Consumer group Public Knowledge, the American Cable Association and others asked the FCC to look into Malone’s holdings as part of the Charter review.  Dish Network ( DISH ) waged the biggest fight against the TWC deal, while  Netflix ( NFLX ) stayed on the sidelines. Malone controls Liberty Broadband ( LBDRA ), which will own about 18% of the new Charter and has rights to name three board members. Privately held media firm Advance/Newhouse will own about 13.5% of Charter. Liberty Broadband stock touched a record high for the second straight day on Wednesday. Malone holds a 28.7% voting interest in Discovery ( DISCA ); a 31.8% voting interest in Starz ( STRZA ); a 37.7% voting interest in the QVC Group, and a 3.3% voting interest in Lions Gate Entertainment ( LGF ), which holds a stake in Epix, according to the FCC. While much of Malone’s media holdings will now constitute Charter’s “affiliated programming,”  the FCC says it already has rules in place to govern those companies’ relationships with other pay-TV providers. “Because New Charter will lack the incentive or ability to withhold or raise prices of affiliated programming, we further find it unnecessary to extend or modify our program access rules or impose other conditions on the licensing of New Charter’s affiliated content,” the FCC said in its May 6  order approving Charter’s acquisitions. The FCC’s conditions on Charter’s acquisitions aim to protect competition from Internet video providers such as Netflix, Hulu and Amazon.com ( AMZN ). Charter will not be allowed to charge data usage-based prices or impose data caps on broadband customers for seven years. Those conditions could impact Comcast if it makes more acquisitions. Some analysts have speculated that Malone could consolidate some of his media assets and/or acquire more. Malone also controls Liberty Global, a Europe-based telecom company. “Malone’s ownership of distribution and content assets globally implicitly has a scale larger than even Comcast, but with a much more fragmented ownership structure and working relationships,” said a Barclays report in January.

FCC Draws Cable Industry Wrath Yet Again With Latest Regulatory Plan

The Federal Communications Commission moved ahead on Thursday with a proposal to regulate prices in the $20 billion market for business data services, drawing criticism from AT&T ( T ) and cable TV rivals. The FCC rules would regulate new entrants in the market — cable TV firms such as Comcast ( CMCSA ), Charter Communications ( CHTR ) and Time Warner Cable ( TWC ) — as well as the biggest providers of  business data services, including AT&T, Verizon Communications ( VZ ) and local phone companies CenturyLink ( CTL ) and Frontier Communications ( FTR ). “The FCC is likely doing this as long-term insurance in case cable does eventually become dominant in any business markets,” said Paul Gallant, analyst at Guggenheim Partners, in a report. The high-speed connections are used for retail outlets, ATM machines and cell towers. Smaller telecom firms such as Level 3 Communications ( LVLT ) and Cogent Communications ( CCOI ) sometimes rent the “special access” lines to serve their customers. Some of these have complained over long-term contracts and termination fees. AT&T has lobbied against the new price regulation, while Verizon has been less opposed. Verizon plans to deploy 5G wireless services and may gain from lower prices for cell tower connections, analysts say. “Never before has the FCC sought to saddle new entrants with such heavy-handed pricing mandates — in any arena, let alone the broadband marketplace, (FCC) Chairman (Tom) Wheeler promised to shield from such regulation,” David Cohen, a Comcast executive VP, said in a blog. Wheeler’s FCC last year approved new “net neutrality” rules opposed by the cable TV industry. Cable TV firms have been been squabbling with the agency over broadband privacy issues, as well as the agency’s plans to open up the set-top box market to more competition. The new rules for business data services could be approved by the end of 2016. “Cable’s entry into the market for business data services over the last few years has resulted in improved services and lower prices for businesses all across America,” said the National Cable & Telecommunications Association in a statement. “It is disappointing that Chairman Wheeler is responding to this unquestionably positive development by asking the commission to consider imposing onerous new rate regulation on these competitive services.”