Charter Communications’ move to acquire Time Warner Cable (TWC) for $56.7 billion has raised several questions about what the deal would mean for subscribers, but more importantly why both companies – and Comcast for that matter – don’t compete in the same markets?
During last year’s failed merger talks between Comcast and TWC it was noted that the two companies rarely overlap in service areas. In fact, few cable companies compete with each other in general, except in rare cases.
The reason for this has to do with the way the cable industry was formed. Just 40 years ago cable was in its infancy and was largely the only option for those with limited access to over-the-air signals. Only in the 1980s did cable transform into something with a wide plethora of channels including pay TV options, with pay-per-view and DVRs following years later. More importantly cable was truly local…
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