Fear the mega corporate mergers — at least when it comes down to customer satisfaction.
Bright House Networks, the sixth largest cable provider in the country, is being acquired by mammoth Charter Communications Inc., the second largest, for $10.4 billion.
"The cable industry has become more centralized and competitive on a national level, and scale has become more important," said Steven Miron, CEO of Bright House Networks.
A partnership will form between Charter and Advance/Newhouse — Bright House's parent company — which will still own 26.3 percent while the former will get 73.7 percent. Bright House Networks LLC has 2.5 million cable subscribers and a huge presence in Florida, with tons of news affiliates, including our own Bay News 9. Bright House also serves Alabama, Indiana, Michigan and California.
There are a few conditions for this gigantic transaction to succeed. Time Warner's right of first offer for Bright House has to expire, Charter and Comcast have to close their previously announced deal, and of course win the approval of Charter's shareholders. These big corporate takeovers take time and are filled with legal details and lengthy paperwork.
Charter is one of two new communication companies taking over Tampa bay area. In February, Frontier bought Verizon's FIOS TV, internet and landline phone businesses for 10.5 billion. Let's hope that the magnitude of these corporations will not affect the quality of their service. Funny coincidence — both Frontier and Charter are headquartered in Stamford, Conn.
So why are cable companies consolidating?
Our guess is that more alternative (read: user-friendly) ways of delivering content online have taken a big chunk of the cable market; you know: Netflix, Amazon, Hulu.
Zacks Equity Research says that Comcast, Time Warner Cable, Charter Communications and Cablevision Systems lost video subscribers, but the combined loss has actually gone down when compared on a year-over-year basis. So economics of scale are working again right in our backyard, reshaping our media landscape. And everyone wants a piece of Florida's biggest media market.