Cable providers may buy telephone companies that serve customers in their franchise areas, the Federal Communications Commission said in an order published today.
The agency granted a request from the National Cable & Telecommunications Association, a Washington-based trade group with members including the largest U.S. cable provider, Comcast Corp. (CMCSA), and No. 2 Time Warner Cable Inc.
The order concerned so-called competitive local exchange carriers, a class of companies that includes Cbeyond Inc. (CBEY) and TW Telecom Inc. (TWTC), and doesn’t include the largest U.S. telephone providers AT&T Inc. (T) and Verizon Communications Inc.
The deals would still be subject to FCC review, and they could help cable companies move into business services, David Kaut, a Washington-based analyst for Stifel Nicolaus & Co., said in a Sept. 7 note.
“We commend the commission for removing outdated obstacles that have historically deterred pro-competitive transactions between cable operators and competitive local phone companies,” Michael Powell, president of the Washington-based trade group, said in an e-mailed statement.
Commissioner Robert McDowell, a Republican, in a statement called the ruling “the right public policy outcome.”
“Consumers will benefit from the increased efficiencies springing from strategic combinations between cable companies and competitive local telecom companies,” McDowell said.
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