The Charter TWC merger cleared its last legal hurdle this week when the California PUC voted to approve. Little surprise here. If I remember right wasn’t this the same regulatory agency that did little during the energy crisis except to watch it happen?
The bigger puzzlement is why the feds (FCC, DOJ) seem to think this merger is such a great idea.
The basic logic of merger approval goes like this:
Creating a new cable operator with 17 million subs could stifle competition, so to fix that we’ll add some mitigating conditions. Thus we have that New Charter will wait seven years before they can implement data caps or usage based billing. OK – we’ll see if Charter figure some other way to get around it.
But how is this merger good for the basic consumer? If holding off on data caps is the answer, than why wasn’t that rule simply put in place before?
At best, the legacy TWC customer will now see a new logo on the bill, and probably find it more difficult to deal with the customer service of a much larger company. And perhaps you can argue that the bigger company will have more resources to innovate and provide new advanced services like WiFi or streaming.
But who are the real winners here?
Certainly not the scores of TWC employees that will likely be downsized over the next couple of years. In fact Charter has already announced which TWC facilities will be closed. Can the loss of these jobs be good for the economy?
What about the basic stock holder. The TWC stock value has seen roughly a 20% increase in the last year, mostly likely driven by merger news. So if you were a major holder of that good for you. But again that might be little comfort for those out of a job.
OK so what about the C level executives like TWC’s CEO Rob Marcus?
Reports are that Rob Marcus, CEO since only 2014, will come out ahead by more than $100M. I know I’m starting to sound like Bernie Sanders here, but does this seem a little unbalanced? Hundreds, perhaps thousands will lose jobs, while the C-suite walks away with millions?
What am I missing?