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Time Warner Cable CEO: Comcast Deal Is a ‘Dream Combination’

Time Warner Cable CEO Rob Marcus, a lame duck with Comcast’s pending $45.2 billion takeover of the No. 2 cable operator, called the proposed merger a “dream combination” that will accelerate innovation and efficiency of the combined company.

Marcus, who took TW Cable’s top job in January, said he remains focused on running the business while also working with Comcast to obtain regulatory approvals for the deal from the FCC, Department of Justice and local authorities.

“Look, I have every confidence that this deal is going to close. The logic of the deal is so compelling. I really don’t see anything undermining that,” he said, speaking at Deutsche Bank’s Media, Internet and Telecom Conference. Marcus said the companies are aiming to close the deal by year-end.

While Marcus sees the combo as a “dream,” consumer activists and others see it as a looming nightmare. Others in the industry, including DirecTV CEO Mike White and 21st Century Fox president Chase Carey, have expressed concerns of the concentrated power of the resulting company, particularly in broadband.

Analysts estimate Comcast-TW Cable would control about one-third of the U.S. broadband market. “Are you really headed to every home having simply one broadband provider — and what are the implications of that?” Carey said, speaking at the Deutsche Bank confab Tuesday.

SEE ALSO: D.C. Critics Blast Comcast’s Plans to Merge With Time Warner Cable

One outspoken critic has been Sen. Al Franken (D-Minn.), who this week again blasted the proposal as a bad deal for consumers. “I think consumers will end up paying more, there will be less competition, there will be less innovation and, worse, even worse service,” Franken said on “CBS This Morning.”

Marcus, at the Deutsche Bank conference, reiterated the position that Comcast and TW Cable do not compete against each other in any markets. “There is no reduction of competition at all,” he said.

As for concerns from TV programmers that Comcast-TW Cable will create a behemoth with undue buying power, Marcus said, “I find that whole line to be totally ironic given the experience we’ve all had over the last dozen years, where (programming) costs have risen faster than the cost customers will bear.”

For now, Time Warner Cable is proceeding with business as usual — and that means more rate hikes in 2014, according to Marcus. He declined to provide an average rate increase, saying different customers will get different rate increases depending on their service bundles.

But he said TW Cable is moving to a more “customer friendly” approach to implementing cost increases: Whereas triple-play customers could see three different rate hikes at different times of the year for video, broadband and voice, the MSO will now raise a customer’s bill once per year. “It’s more customer friendly, and it’s easier for us to manage,” Marcus maintained.

Marcus touted improvements in churn for the first two months of 2014 compared with past years, but Time Warner Cable is still losing customers. In January and February, the operator had a 5% year-over-year increase in customer connects, but disconnects were in the “double digits,” he said. The operator shed 833,000 video subscribers in 2013, including a record net loss of 306,000 during the third quarter fueled by a monthlong blackout of CBS amid a standoff over carriage terms.

In January, Charter Communications, with the backing of John Malone’s Liberty Media, had launched a takeover bid for TW Cable before Comcast stepped in. Marcus, in explaining why Time Warner Cable opted for the Comcast merger, said that “relative to any other alternative, we felt this maximized value.”

Comcast expects to achieve $1.5 billion in cost savings through the Time Warner Cable acquisition. Marcus said the “revenue upside is even greater than on the cost side,” particularly in the business services market, where the combined company can compete on a more national basis.

“I’m trying to stay focused as if we hadn’t announced the deal,” Marcus said. “The team is committed to knocking the ball out of the park this year.”

SEE ALSO: Comcast Touts TW Cable Deal as Expanding Low-Cost Broadband Program

Marcus, previously the operator’s president and COO, was named chairman and CEO of TW Cable last July and assumed the role in January. He replaced Glenn Britt, who retired at the end of 2013.

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