Comcast largest cable firm after AT&T buy
Comcast Corp yesterday became the world's largest cable company, following its merger with AT&T Broadband, which was spun off from parent AT&T Corp yesterday as part of the $29.2bn deal. The new Comcast Corp has 21.4 million cable TV subscribers and is worth an estimated $60bn.
The company obtained regulatory clearance for the merger from the US Federal Communications Commission last week. The FCC voted 3-to-1 that the merger was in the public interest as it would allow economies of scale that could speed up the rollout of broadband internet access services.
The merged entity has about 6.3 million digital video subscribers, 3.3 million broadband internet subscribers and 1.3 million cable telephony subscribers. It will offer services in 41 US states and, after 1,700 layoffs, will employ 59,000 people. Its nearest competitor, AOL Time Warner Inc, is about half as big in terms of subscribers.
Critics say the companies have created a powerhouse with the potential to abuse its size. FCC commissioner Michael Copps voted against the merger, saying: "The sheer economic power created by this mega-combination, and the opportunities for abuse that would accompany it, outweigh the very limited public interest benefits."
The stock transaction saw AT&T's shareholders receive 0.3235 Comcast shares for every AT&T share they owned. The combined company is owned 56% by AT&T shareholders, who receive a 66% voting interest. The Roberts family, which owned much of the old Comcast, get one third of the outstanding voting interest.