A recent story in the Wall Street Journal about Verizon considering a takeover of Charter, has the internet worried and abuzz. A Charter (itself a takeover of Time Warner Cable) and Verizon merger would create an (evil) actual telecoms giant and further box in millions of already unhappy consumers.
While a deal isn’t yet on the table, Charter’s shares are up by more than 7% following the news. Under President Obama, deals like this would have been seen by the FCC and Justice Department in a cautious light. However, under President Trump- including his newly-appointed FCC Chairman Ajit Pai- the administration is decidedly more business friendly. It remains to be seen just how something like this will be dealt with.
From the article:
“Merging the two companies would give the new Verizon/Charter behemoth the ability to sell “triple-play” bundling, the lucrative contracts where customers are getting wireless, broadband and cable from the same company. With the cable TV business under fire from cord-cutters and Verizon’s margins getting squeezed by T-Mobile, service bundling could potentially give both giants a new way of making money for the next few years.
Then, you have the standard monopolistic advantages of merging two internet providers. Verizon still provides broadband to millions of customers, as does Charter. Internet in the US is already a monopoly in wide swathes of the country. A Verizon-Charter merger would give the combined company about 26 million broadband subscribers, which is a little more than a quarter of the entire country.”
I can tell you right now that I’m not thrilled at all about this news and will be watching how this story unfolds very carefully. We will update you as we have more information.
Source: BGR
