Adelphia to be Acquired by Time Warner and Comcast

While it's a bit ancillary to the HD industry, a big shakeup in the cable industry occured this week as Adelphia agreed to be acquired by Comcast and Time Warner Cable, the two largest cable providers in the U.S., for $17.6 billion in cash and stock. When the transaction is completed in 9 to 12 months, Time Warner will receive about 3.5 million Adelphia customers, including those in Los Angeles, Cleveland, upstate New York, the Carolinas and Maine, which are all complementary with current Time Warner cable systems. Multichannel News reports that Time Warner will also take over Comcast's systems in L.A. and Orange County, making Time Warner the dominant cable provider in the lucrative Southern California market. Time Warner will also receive Comcast's 600,000 subscribers in Dallas.

For its part, Comcast will pick up Adelphia's operations and subscribers in Florida, Boston, Pittsburgh, Hartford (Conn.), Colorado Springs and Vermont. According to Multichannel News, it will also take over Time Warner Cable's operations in Minneapolis, Memphis, Mississippi, Louisiana and Florida (Cape Coral and St. Augustine). Comcast's subscriber base will increase by 1.8 million, to a grand total of 23.3 million.

Time Warner plans to spend $650 million in the next three years to upgrade Adelphia's operations in certain markets. Currently, 85% of Adelphia's systems have already been upgraded to 750-megahertz or better. This is good news for Adelphia customers in areas where advanced services like HD and DVR are not yet available, and probably means that Time Warner will accelerate Adelphia's development and deployment of Voice Over IP (VoIP) services, which Time Warner has already rolled out in all of its markets.