Time Warner Cable headquarters in New York City (Reuters/Joshua Lott)

Charter Communications said Tuesday it's buying Time Warner Cable in a $55 billion mega deal that would give Charter some 24 million customers in parts of the country ranging from Washington state to South Carolina.

Hanging over the announcement, though, is Comcast. You can't talk about an acquisition of Time Warner Cable without discussing Comcast's failed bid for the nation's second-largest cable company, which collapsed last month.

[Charter strikes deal with Time Warner Cable to create mega cable and Internet firm]

It's clearly something Charter has thought about, too — and the company addressed the issue head-on in response to the first question on an investor call Tuesday morning.

"We're a very different company than Comcast, and this is a very different transaction," Charter chief executive Tom Rutledge said on the call.

Just like the Comcast-TWC deal, the Charter-TWC merger has to be approved by federal regulators, including the Federal Communications Commission.

Charter is already moving to counter some of the arguments that helped sink the Comcast merger. For instance, what executives are calling the "New Charter" will be much smaller than a Comcast-Time Warner Cable mash-up would have looked like, company officials say, which could help limit regulators concerns about potentially anticompetitive behavior.

While a Comcast deal would have controlled more than half the country's high-speed Internet subscribers and roughly one-third of the nation's cable TV market, the latest deal would give Charter only about 30 percent market share in broadband and 17 percent in cable video, according to the company.


Rutledge said Charter is in favor of an open Internet and that it doesn't plan to block or slow Web traffic. The company is also proactively expanding its broadband capacity so companies like Netflix can deliver their content to customers without interruption, Rutledge said.

"Charter invests significantly in interconnection before ports get congested," said Rutledge, in a clear nod to a debate between Comcast and Netflix over who should pay for growing the company's Internet network.

Charter says it has no stake in national TV programming, a reference to regulator concerns that Comcast (with its ownership of content through NBC Universal) could have used its greater power to demand concessions from companies that either rely on NBC's content or compete against it.

"We're talking about a resulting entity that's significantly smaller without any vertical integration concerns," said Time Warner Cable chief executive Rob Marcus.

Marcus argued that the new Charter, as an Internet provider, would be smaller than competitors like AT&T, Verizon and Comcast, and would be about the same size as T-Mobile and Sprint.

With Comcast still casting such a large and recent shadow over Time Warner Cable, it's in Charter's interest to prove to regulators that this deal isn't like Comcast's. The FCC declined to show its hand Tuesday, with agency chairman Tom Wheeler saying he'd take a close look at the deal "to see how American consumers would benefit." But reports last week suggested Wheeler had called executives at Charter and TWC to say that he wasn't opposed to cable mergers just because he moved to block the Comcast deal.

That should buoy the hopes of Marcus and Rutledge.

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