Verizon and Charter kick off rumour mill with mammoth merger murmurs

Rumour has it two of the largest telcos in the US are having hushed conversations over a potential merger of Verizon and Charter.

According to the Wall Street Journal, representatives from both sides are having preliminary talks though nothing has been put on the table yet. Verizon is currently the largest wireless provider in the US, and following Charter’s acquisition of Time Warner Cable, it is the second-largest provider of cable, only behind Comcast, a merger between the two would create one of the largest telcos worldwide.

Although such a deal would have faced heavy regulatory scrutiny in the previous administration, the appointment of Republican Commissioner Ajit Pai as Chairperson of the FCC could see a change in the regulatory environment. Pai is one politician who has typically been sympathetic to the pleas of the telco industry, many of whom have suffered under the success of the OTTs, and does seem to be open to new ideas.

The deal itself will still be placed under heavy scrutiny, though if Pai’s reputation as a more commercially leaning politician, as well as his sympathies for the telco industry are anything to go by, consolidation in the segment would not be an unusual trend moving forward.

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While such an agreement would certainly create headlines, it has not been received positively by all corners of the industry.

“Rumours are flying that Verizon, the nation’s second-largest phone company, wants to merge with Charter, the second-biggest cable company,” said Craig Aaron, CEO of open internet activist group Free Pass. “This isn’t a trial balloon so much as a hallucination. This unfathomable merger would consolidate unprecedented media power in one company, kill countless jobs and hike too-damn-high cable bills even higher.

“Are we really supposed to entertain a merger that would leave much of New York City with a single high-speed internet provider? A deal like this might excite Wall Street bankers and industry lobbyists, but anyone else can see that it would be a disaster for competition, innovation and the public interest.”

Trump’s previous opinions have seemingly been against the creation of such monstrous organizations, though a rollercoaster ride of opinion ping pong should not be considered surprising moving forward. All the signs are pointing towards the administration being in favour of such transactions, contrary to previous opinions, however who knows whether this will be the case next week.