Charter Communications is buying Time Warner Cable (TWC) in a deal that values the latter, larger company at $78.7 billion. The two firms will merge together under the newly created parent company New Charter, which will become the second biggest cable provider in the US after Comcast. A separate acquisition by Charter of the smaller cable company Bright House Networks for $10.4 billion means that the new company will soon have 23.9 million customers in 41 states.

In a statement released after the announcement of the deal, Wheeler said: "The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The Commission will look to see how American consumers would benefit if the deal were to be approved." Even if the deal is approved, Comcast will remain the biggest US cable provider with around 27 million customers.

The creation of New Charter comes at a time when cable companies are struggling to keep up with the changing habits of American TV viewers. The rise of streaming video and competition from tech-savvy companies like Netflix and Amazon has created a difficult market, and mergers such as this give cable companies greater leverage when bargaining with TV networks.

Update May 26th, 8:05AM ET: Updated to include statement from Tom Wheeler.