Charter’s broadband expansion
Previously in this series, we looked at synergies from the Charter Communications (CHTR), Bright House Networks, and Time Warner Cable transaction that was finalized earlier this year. The transaction gave the new Charter Communications the second-largest wireline Internet base in the United States.
Charter’s scale in the US Internet market
As you can see in the above graph, as of the end of 2Q16, Comcast’s (CMCSA) Internet subscriber base was the largest in the United States, with 23.9 million broadband subscribers. Charter was second with 20.6 million broadband subscribers. After Charter, the third-largest Internet customer base belonged to AT&T (T) with 14.1 million broadband subscribers. Verizon Communications (VZ) had the fourth-largest Internet subscriber base with 7.0 million broadband subscribers.
FCC conditions on the Charter merger
The FCC (Federal Communications Commission) approved the merger but stipulated certain conditions for the transaction. These conditions include no data cap and no usage-based pricing for Charter’s residential broadband customers for seven years. Charter offers minimum Internet speeds of 60 Mbps (megabits per second). According to the FCC conditions, the company plans to offer the same to Time Warner Cable and Bright House Networks customers. The conditions also included deploying high-speed broadband to at least 2.0 million residential and small business markets.
In the next part of this series, we’ll see why Charter could be planning to build out its wireless network with the activation of its MVNO (mobile virtual network operator) agreement with Verizon.