Hoover City Council agrees to cable deal with Charter Communications

The Hoover City Council, during its April 20 meeting, authorized city officials to sign a new cable television franchise agreement with Charter Communications.

The renewal of the agreement with Marcus Cable of Alabama, LLC, d/b/a Charter Communications, resolves a situation in which the current contract was set to expire the day of the council meeting (April 20). Under the resolution, the city would extend the Charter franchise so that it would expire simultaneously with the current Bright House franchise on Oct. 16, 2017.

The new cable agreement approved by the council has a couple major hurdles to overcome. Charter Communications, the nation’s fourth-largest cable operator, announced on March 31 it has agreed to a $10.4 billion merger with Bright House Networks LLC, America’s sixth-largest cable service provider. A city official told the council the new cable franchise agreement won’t go through unless the FCC approves the Charter-Bright House merger as well as cable rival Comcast’s pending acquisition of Time-Warner. In that Comcast/Time Warner merger, some assets/customers in  “overlapping” markets are being sold to Charter.

For Hoover residents, the deal means less of a choice for cable services. In 2012, the City of Hoover signed a 5-year franchise agreement with Bright House. In his letter to Hoover council members about the proposed agreement with Charter, Ben Powell, Hoover’s supporter services director, said the city had grown “comfortable with Bright House and was desirous of the competitive cable environment that they brought to Hoover.”

If the deal clears regulatory approval then the combined business will be conducted through a partnership, with Charter owning 73.7 percent and Bright House’s parent company, Advance/Newhouse, owning 26.3 percent. Should the pending Charter-Bright House merger be approved, the cable industry in Hoover will become less competitive.

At some point during the proposed merger process, Charter and Bright House will be required to request the city’s approval, via another formal resolution or ordinance, of the changes of control related to their plans. Powell told the council via his letter that at that time, he recommends the city to “conduct a full assessment of the cable environment in Hoover along with the impact of the proposed merger on the citizens and the community.”