The good people at the NYT have given me more reason to get excited about next month's NCTA Cable Show in New Orleans: Watching the speculation, rumour and intrigue behind who might try and take over Time Warner's cable systems, which are about to become sort of "up for grabs" as they get spun off.
This is going to be fun to watch for a number of reasons. Last time there was a major group of systems up for sale was when AT&T sold off their Cable systems, leading to a "friendly" competition between Cox Communications, and the eventual winner Comcast. That victory gave Comcast a huge market advantage in the number of subscribers, but Comcast, which has a reputation for fighting like Rocky, the unofficial mascot of its' home city of Philadelpha, may not be able to benefit from going after TIme Warner without helping Cox, their old Atlanta-based foes.Jeffrey L. Bewkes, the chief executive of Time Warner Inc., continued to trim what has for years been the world's largest media company by announcing Wednesday that it would completely spin off its cable company.
The news -- which was not unexpected and follows an earlier transaction in which a portion of the cable unit was spun off into a separate public company -- came as Time Warner reported quarterly earnings that were largely in line with Wall Street's expectations.
Why? When Reagan signed the 1984 Cable Act, it included the "70/70" rule, which said that if 70% of households that could subscribe to Cable Television (then a much more expensive "luxury" service) did so, the FCC could re-regulate the industry, including institute pricing and ownership regulations.
