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By Tim McElgunn
Sept. 29—Altice, SA yesterday submitted a filing to the Federal Communications Commission asking the commission to move quickly to approve its proposed acquisition of Suddenlink, Inc.
In its filing, the Amsterdam-based company highlights its track record of increasing investment following similar deals in various international markets.
The company pointed to network upgrades in the systems it has acquired since 2011—with most of them upgraded to DOCSIS 3.0 across 100 percent of their footprint—and network expansion to pass approximately 100,000 new homes in three of those systems.
The company does not specifically promise to follow the expansion blueprint it has developed for its other operations, noting that “not every region is well-suited to this endeavor,” but said, “Altice's track record demonstrates that it has the wherewithal and vision to expand its networks and, in turn, the number of subscribers that can benefit from its services.”
Suddenlink is already embarked on a major network upgrade to its systems under its “Project Gigaspeed” initiative. Suddenlink has spent approximately $100 million to date—including Bloomberg BNA estimates of year-to-date 2015 expenditures— to prepare its data infrastructure to deliver gigabit speeds to residential and small business customers. Altice said that completing the upgrade is projected to cost an additional $90 million in 2016 and 2017. The company said that its size and access to financing “will ensure that Suddenlink has access to sufficient resources to realize Project Gigaspeed's objectives.”
Based on the benefits it outlines—and with only two parties commenting since the FCC opened the transaction docket on June 24 and all but two state-level approvals in hand—Altice urged the commission to “complete its review and approve the proposed Transaction promptly.”
The company also wants the commission to decide on the Suddenlink deal separately from the company's proposed acquisition of Cablevision. Altice said, “The Commission will have ample opportunity to consider the Cablevision Transaction when applications are filed in connection with that transaction.”
It is unlikely that the commission will be prepared to grant that request, given the rapid changes in the U.S. cable market and the commission's focus on maximizing competition in the market. A combined Suddenlink and Cablevision would create the fourth largest U.S. cable operator, assuming Charter Communications is successful in its bid to roll up Time Warner Cable and Bright House Networks. In that environment, more than 90 percent of U.S. cable subscribers would be served by just four companies.
While the combined company would be significantly smaller than the industry leaders—Comcast with 22 million subs and New Charter with about 16 million—the commission will likely want to examine all of the cable deals before it holistically. Indeed, the commission might even hit the pause button on its review of the Suddenlink deal while it waits for Altice's Cablevision filings.
The FCC declined to comment for this story, saying only, “we have an non-binding goal of completing transaction reviews within 180 days, but that is only a goal, which can be delayed if we need more information or for other reasons.”
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