The Time Warner Cable office is shown in Carlsbad, Calif. (Mike Blake/Reuters)

A breakup of Time Warner Cable, which Comcast and Charter Communications are said to be considering as part of a joint bid, would let the industry consolidate while potentially sidestepping regulatory hurdles.

Comcast and Charter have discussed the breakup scenario as an alternative to each making rival offers for Time Warner Cable, people familiar with the matter said last week. The move would resemble the purchase of Adelphia Communications by Comcast and Time Warner, which split the company between them in 2006.

While Comcast has considered a solo deal for Time Warner Cable, that approach would combine the two largest U.S. cable companies and invite stricter scrutiny by the Federal Communications Commission and antitrust regulators. Such a merger would create a dominant company with almost three-
quarters of the nation’s cable subscribers.

“A joint deal takes away all the issues of the transaction — including regulatory concerns for Comcast — and it makes it easier for Charter to get some financing since it’s not as large,” Vijay Jayant, an analyst with ISI Group in New York, said in an interview.

Justin Venech, a spokesman for Stamford, Conn.-based Charter, declined to comment on the talks, as did Comcast spokesman John Demming. Bobby Amirshahi, Time Warner Cable spokesman, also declined to comment.

The Comcast-Charter talks have been preliminary, and a Time Warner Cable breakup is one option under consideration, the people with knowledge of the discussions said. Parts of Time Warner Cable would complement each company’s coverage area, increasing the transaction’s appeal, said the people, who asked not to be identified because the deliberations are private.

Comcast, which leads the industry in subscribers, is strong in places such as San Francisco, Washington and its home town of Philadelphia. Time Warner Cable — No. 2 to Comcast — serves its New York City headquarters, along with Los Angeles, Dallas and other markets. Charter ranks fourth, with customers in St. Louis and other cities.

Comcast and Charter would have to argue to antitrust regulators that they can split the assets and maintain competition in the industry, said John Briggs, a lawyer at Axinn, Veltrop & Harkrider in Washington.

When Comcast and Time Warner Cable acquired and broke up Adelphia in 2006, Time Warner gained 3.3 million customers and Comcast added about 1.7 million. Comcast used the deal to strengthen its presence in Florida, Massachusetts, Pennsylvania and Washington. Time Warner Cable bulked up its five major clusters of subscribers in New York, Texas, California, Ohio and the Carolinas.

If Comcast bought Time Warner Cable outright, it would create a company with 33.3 million cable customers. Although the two parties don’t have many overlapping regions, the deal would set up another showdown with the FCC.

The takeover speculation sent Time Warner Cable shares to a record high Friday, with the stock rising 10 percent, to $132.92. Charter surged 6.1 percent, to $134.66, and Comcast climbed 4.4 percent, to $49.52.

Billionaire John Malone, whose holding company acquired a 27 percent stake in Charter in May, has pushed for more consolidation in the cable industry, saying it will help providers cut costs and get better rates from the networks.

— Bloomberg News