New York City: Altice-Cablevision Might be “Disapproved.”

Maya WileyDrahi tells Wall Street he’d drastically cut employees and capex. New York City’s counsel Maya Wiley finds, “a number of important concerns” in an interview with Shalini Ramachandran Wiley adds, “Altice is talking about $900 million in synergies. Well, what’s getting cut? How’s that going to impact the economy of New York and quality of services? We certainly are not afraid to disapprove a transaction.” 

Last month, I wrote, “Craig Moffett may have just killed the Altice-Cablevision Deal.” Craig wrote a devastating report that ripped into Altice’s finances. New York City will judge whether the deal is good for 1) jobs, 2) service levels, 3) prices, and 4) future investment in the network. My analysis is they fail all four.   

The $900 million has to come out of an operating budget of $2.6 billion, almost certain to reduce service levels. It includes firing 900 people and cutting 25% from capex. They are paying $6,000/subscriber, requiring a profit of $40/month just to pay off the financing for the purchase. Cablevision’s net income over the last three years has been about $30/month. Their bonds are hard to sell. Altice could be facing bankruptcy if they don’t get large price increases. Cablevision is already highly leveraged, with $10B in debt, about $6,000/customer.

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Comcast $10 for the Poor Extending to Singles and Senior Citizens

500,000 have already signed up in the most successful program in the U.S. In Philadelphia, Comcast has agreed to extend the program to low-income individuals and seniors, “Internet Essentials” now delivers 10 megabit service, enough for an HD channel and plenty of surfing. They’ve simplified the application form, reduced red tape and have fewer restrictions. 

In August of 2014, while Comcast was looking for approval of the Time Warner deal, I spoke with David Cohen of Comcast about the program. “We’re going to expand it to senior citizens and others, not just families with schoolkids.” Many thought this was just hollow pr to look good in D.C., but talking to Cohen made it clear this was a passion project for him. He’s now expanding the program significantly despite losing the merger fight. 

Bob Fernandez, in a thoughtful article, quotes Deb Socia of Next Century Cities. “This will be what people look at when they are organizing their franchise-renewal agreements in the future.

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