Comcast, the cable and internet service giant, is attempting to smooth the road for its mega-merger acquisition of Time-Warner Cable by selling off some its services and assets to the nation's third-largest cable provider, Charter.
But critics of Monday's announced deal say neither consumers nor regulators should be fooled by the scheme that will do nothing to improve services or allay concerns about the creation of ever-larger cable corporations.
According to Reuters:
Comcast Corp on Monday agreed to a three-way deal with Charter Communications Inc as part of Comcast's efforts to win regulatory approvals for its proposed $45 billion purchase of Time Warner Cable Inc.
The transaction would make Charter, which lost out to Comcast in a bid to acquire Time Warner Cable, the second-largest cable provider in the United States.
The agreement would leave Comcast with less than 30 percent of the U.S. residential cable or satellite TV market, a factor seen as a key step to pleasing regulators. Charter would have about 6 percent of the pay-TV market, with an eventual shot to climb to 9 percent.
Under the deal, Charter would pay Comcast $7.3 billion for 1.4 million subscribers. Comcast would divest another 2.5 million subscribers into a new publicly traded company that would be two-thirds owned by Comcast shareholders and one-third owned by Charter.
But experts at Free Press, a media watchdog group in Washington DC, however, say the deal is a sham.
"This convoluted transaction may change the final tally of subscribers under the proposed merger, but it can't change the fact that this deal is a big loss for innovation and competition," said Matt Wood, the group's policy director.
"Cable barons have always been great at dividing up the country and refusing to compete with each other. Transforming three giant companies into two behemoths gives no comfort to content providers or consumers. Lawmakers and antitrust authorities shouldn’t be fooled either."