Comcast (CMCSA) Sees Time Warner Deal Closing Mid-2015

Comcast (Nasdaq: CMCSA) EVP Daivd Cohen posted the following to the company's blog on Wednesday. In part, Comcast sees its deal for Time Warner (NYSE: TWC) closing in the middle of the year.

The following is the complete post:

Last night, I had the privilege of speaking to a group of students and faculty at the Center for Media Law and Policy of the University of North Carolina, one of our nation’s great public academic institutions. My talk examined the democratization of media and the rapid pace of change we are seeing in media and technology today.

North Carolina will be a new state for Comcast after the Time Warner Cable transaction closes. So in preparing for my remarks, I had the opportunity to step back and reflect on the incredible set of public interest benefits – benefits to consumers, benefits to the public, and benefits to small, medium-sized, and large enterprise businesses – that arise directly out of our transaction – benefits that have not been seriously challenged by even the most ardent critics of the merger. We remain incredibly excited about the these transaction benefits – including faster internet speeds, a substantially better video viewing experience, more competition in the business market, our commitment to community and to diversity, and our nationally renowned low income broadband adoption program, Internet Essentials – that we’ll bring to North Carolina and all the other new TWC communities.

The FCC and the DOJ are continuing their regulatory reviews of the TWC transaction. Given the FCC's recent decision to pause the shot clock, we have recently reassessed the time frame when we expect the government's regulatory review to be completed and now expect that the review should be concluded in the middle of the year. During this period, we are continuing to describe the public interest benefits that will come to North Carolina and other TWC areas.

Importantly, our acquisition of TWC does not eliminate any competition in North Carolina or any other state, while it will increase the incentive and opportunity for investment, research and development, and innovation.

For example, we'll be investing in upgrading TWC’s entire infrastructure, which will enable us to bring Comcast’s faster Internet speeds to all TWC customers. This will represent a dramatic improvement in HSD speeds to North Carolina and the country, given that today, over 90% of our customers subscribe to speeds of 25 Mbps or higher, and over 50% receive 50 Mbps or higher, while TWC’s flagship speed tier is only 15 Mbps down. Comcast’s broadband speeds now substantially exceed those of TWC on multiple dimensions, and the difference in both downstream and upstream speeds has increased over time. For example, using the FCC’s most recent data, over five times as many Comcast customers subscribe to speeds of 25 Mbps downstream and 3 Mbps upstream as compared to TWC customers. Comcast’s average Internet speed is just over 50 Mbps down, two and a half times TWC’s average speed of 20.3 Mbps down.

An economic analysis has determined that if Comcast were to accelerate TWC subscribers' speeds by even 5 Megabits per second for one year that alone would be worth approximately $324 million in consumer value. In fact, if the transaction results in raising the average TWC customer’s broadband speed to the level of Comcast's, as we plan, that would deliver approximately $1.1 billion in consumer benefits annually.

Beyond the residential high speed data benefits, there also will be substantial financial benefits resulting from the combination of Comcast and TWC’s business services. An analysis that we submitted to the FCC shows that the TWC transaction will yield approximately $7.9 billion in cost savings over 10 years for enterprise business customers. And these enormous benefits do not even count the significant additional cost savings and other benefits the transaction will also bring to regional, super-regional, and small and medium-sized businesses, or the enhanced value for residential customers who will also greatly benefit from the network improvements implemented to serve new business customers.

In addition to faster Internet speeds, I also had a chance to talk about our exciting X1 video platform – and the improved, cutting edge video viewing experience including the talking guide that TWC customers will enjoy in North Carolina and nationally after the transaction closes. Enhanced search, cloud-based DVR services, the ability to watch live and recorded content in and out of the home, and more On Demand and TV Everywhere content are just some of the advanced features we will bring to former TWC customers.

I also spoke about an important issue that is critical to the democratization of media, the stubbornly resilient issue of the digital divide.

This is a societal problem that government, business, and non-government organizations have a shared responsibility for solving. At Comcast, closing the digital divide has also been one of our most important Community Investment priorities for years.

With the TWC transaction, we’ll be expanding our nationally acclaimed Internet Essentials program to North Carolina and the other TWC areas across the country like New York, California, and Dallas. A couple of weeks ago, we issued our most recent Internet Essentials status report. We announced that in just the middle of its fourth year, Internet Essentials has connected more than 450,000 families, or 1.8 million low-income Americans, to the power of the Internet at home. To put that in perspective, 1.8 million is larger than the populations of 96 of America’s 100 largest cities as well as 12 states and the District of Columbia. In North Carolina, 1.8 million people connected would be about the size of the entire population in the cities of Charlotte, Raleigh, Greensboro, and Durham combined.

It was an honor to speak with the students and guests at the Center for Media Law and Policy, which is co-sponsored by the schools of Law and Journalism. Law and journalism are two passions of mine, and it was terrific to see a new generation of prospective lawyers and journalists at "work." The students were great – smart, curious, engaged, and both interested and interesting. And I loved the students’ engagement throughout the event. Having the opportunity to discuss the dynamic world today of media, technology, public policy, journalism, and the law with such an outstanding group of students was a real treat.

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