Expert Insight: Time Warner consumers won't get a break with Charter acquisition

May 27, 2015

How will Charter Communications purchase agreement of Time Warner Cable this week impact customers? One business expert believes consumers may see some improvements regarding their technology, but not with their bills.

Credit WBFO News File Photo

G. Lawrence Sanders is a professor of Management Science and Systems with the University at Buffalo's School of Management.  Sanders spoke with WBFO's Jay Moran on Morning Edition about the acquisition.

"An important strategy for these cable providers is to have more leverage when they negotiate with content providers. If a company has 20 million subscribers, rather than 4 million, which is very much what happened in this situation, they are able to negotiate from a stand point of strength with the content providers," notes Sanders.  "Also, they generate a lot more advertising revenues."

"In the short run, I don't see any silver lining for consumers," says Sanders. "I doubt that the merging of Charter and Time Warner will result in lower costs for consumers. That's my own insight in this situation. I don't think prices are going to decrease. I think there's a lot of emphasis in terms of increasing their margins, their profitability."

Sanders goes on to say there is potential for increased technological capability for streaming 3-D and high definition content, noting increased speed is an important area.  

Sanders believes the acquisition will make Charter competitive with Comcast.