The rumors are flying around, and they don't all entirely agree with each other. But they all seem to agree that Comcast is about to announce a deal for TW Cable in the $44-45B range. [Followup: it's now official with a $45.2B price tag]
TW Cable had previously rejected a bid from Charter, while rumors have swirled that Charter might tap Comcast to help out in some sort of three way deal to raise the price and win them over. In fact, a less trusting soul could see this as exactly that, even though at first blush Comcast seems to be shoving Charter out of the way. The more public, acrimonious challenge Charter seems to have been building toward is a less elegant path.
Even if this deal does get announced, it is anything but a done deal given the scrutiny regulators will give it. Comcast has to be ready to divest large swaths of TW Cable to even have a chance of winning them over. Charter and its behind-the-scenes shareholder mogul John Malone may simply have found a better way to get what they want by convincing Comcast to take point.
Yet I think they are all a bit overly optimistic about the regulatory environment. It feels to me as if a storm is coming, started by M&A forays in both wireline and wireless but perhaps worked into a frenzy by network neutrality arguments and those congressional elections that are on the menu later this year.
The argument that cable companies don't overlap so there is no competitive issue just isn't going to carry it off. Taken to an extreme, that path leads to a single national cable MSO in a world where cable-based internet access has already basically defeated DSL and where FTTH is only taking hold in pockets.
Beyond the cable subscriber market itself, it's interesting to note that Comcast showed up on Vertical Systems Group's end-of-year US Carrier Ethernet scorecard yesterday. They grew the fastest, surging past Level 3 and into the top tier for the first time. TW Cable also moved up the chart, passing XO and Cox, and that was before they closed the DukeNet deal.