Auburn cable subscribers may have a new provider within a year.
In a deal that promises to redraw the cable TV landscape and give the two biggest companies more clout, Time Warner and Comcast Corp. Thursday announced a deal to acquire Adelphia Communications and its 5 million subscribers.
The $17.6 billion cash-and-stock deal, combined with an agreement between the two buyers to divvy up and swap subscribers, would push them further ahead of the rest of the cable field, and could give them greater ability to withstand satellite TV rivals, roll out new services and negotiate programming discounts.
The deal, which the buyers expect to close in nine to 12 months, includes the 1.7 million subscribers in Adelphia's Buffalo market, which includes Auburn.
Comcast, the biggest cable operator, would add 1.8 million subscribers to its 21.5 million and would undo its 21 percent stake in Time Warner Cable.
The deal would give the two buyers bigger concentrations, or clusters, of subscribers in many parts of the country.
"You are increasingly seeing the cable world coalesce into the twin pillars of Comcast and Time Warner," said Sanford C. Bernstein & Co. analyst Craig Moffett. "The rest of the industry is left with table scraps and is likely to have a harder and harder time sustaining competitive economics."
Although consumer activists and satellite TV rivals criticized the prospect of the big growing bigger, and the deal requires approval from federal regulators, local franchise authorities and the bankruptcy court that has overseen Colorado-based Adelphia for three years, the two buyers said they are confident.
"The fat lady has sung," Time Warner chairman Dick Parsons said, rejecting the possibility that other bidders may still have a chance to top the joint bid, which includes $12.7 billion in cash.
On Wednesday, a federal bankruptcy judge approved a provision that would require Adelphia to pay the two winning bidders a penalty of $440 million if the company switches to another bidder.
"The whole cable business is changing," Parsons said, adding that the deal gives Time Warner a greater opportunity to roll out services such as high-speed Internet, video-on-demand and Internet-based phone access.
Consumer activists criticized the deal, saying it gives the buyers too much power to raise consumer prices and decide which channels get on cable.
"It allows the two largest cable companies to become larger fortress monopolies in key urban markets," said Gene Kimmelman, senior director of Consumers Union.
Satellite TV operators also balked.
"You are rebuilding regional monopolies that will give them power over regional programming, including sports programming," said DirecTV lawyer Bill Wiltshire. "It gives them incredible leverage and the incentive and ability to discriminate against other programming distributors such as DirecTV."
Adelphia chief executive William Schleyer said the deal was "superior to Adelphia emerging as a stand-alone company."
But Peter Morgenstern, a lawyer for the Adelphia shareholders committee, said the winning bid did not meets its expectations and it should be able to consider higher bids in the future. "The process is far from over," he said.
The $17.6 billion cash-and-stock deal, combined with an agreement between the two buyers to divvy up and swap subscribers, would push them further ahead of the rest of the cable field, and could give them greater ability to withstand satellite TV rivals, roll out new services and negotiate programming discounts.
The deal, which the buyers expect to close in nine to 12 months, includes the 1.7 million subscribers in Adelphia's Buffalo market, which includes Auburn.
Comcast, the biggest cable operator, would add 1.8 million subscribers to its 21.5 million and would undo its 21 percent stake in Time Warner Cable.
The deal would give the two buyers bigger concentrations, or clusters, of subscribers in many parts of the country.
"You are increasingly seeing the cable world coalesce into the twin pillars of Comcast and Time Warner," said Sanford C. Bernstein & Co. analyst Craig Moffett. "The rest of the industry is left with table scraps and is likely to have a harder and harder time sustaining competitive economics."
Although consumer activists and satellite TV rivals criticized the prospect of the big growing bigger, and the deal requires approval from federal regulators, local franchise authorities and the bankruptcy court that has overseen Colorado-based Adelphia for three years, the two buyers said they are confident.
"The fat lady has sung," Time Warner chairman Dick Parsons said, rejecting the possibility that other bidders may still have a chance to top the joint bid, which includes $12.7 billion in cash.
On Wednesday, a federal bankruptcy judge approved a provision that would require Adelphia to pay the two winning bidders a penalty of $440 million if the company switches to another bidder.
"The whole cable business is changing," Parsons said, adding that the deal gives Time Warner a greater opportunity to roll out services such as high-speed Internet, video-on-demand and Internet-based phone access.
Consumer activists criticized the deal, saying it gives the buyers too much power to raise consumer prices and decide which channels get on cable.
"It allows the two largest cable companies to become larger fortress monopolies in key urban markets," said Gene Kimmelman, senior director of Consumers Union.
Satellite TV operators also balked.
"You are rebuilding regional monopolies that will give them power over regional programming, including sports programming," said DirecTV lawyer Bill Wiltshire. "It gives them incredible leverage and the incentive and ability to discriminate against other programming distributors such as DirecTV."
Adelphia chief executive William Schleyer said the deal was "superior to Adelphia emerging as a stand-alone company."
But Peter Morgenstern, a lawyer for the Adelphia shareholders committee, said the winning bid did not meets its expectations and it should be able to consider higher bids in the future. "The process is far from over," he said.
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