Charter Communications said it has promoted long-time chief operating officer John Bickham to vice chairman, ahead of his previously announced retirement at the end of 2022, and said it will move chief financial officer Christopher Winfrey to COO, and EVP of finance Jessica Fischer to CFO. In addition, chief product and technology officer Rich DiGeronimo will add oversight of Charter’s Network Operations to his responsibilities. The changes are effective immediately, with each executive reporting to chairman and CEO Tom Rutledge. 

Other Charter executives — senior EVP David Ellen; EVP government affairs Catherine Bohigian, and EVP, general counsel and corporate secretary Rick Dykhouse — will also continue to report to Rutledge. 

Bickham, a 35-year veteran of the cable industry, joined Charter in 2012 from Cablevision Systems (now Altice USA) where he worked with Rutledge. Rutledge had been COO of Cablevision and was named Charter CEO in December 2011. The two had also been colleagues at Time Warner Cable. In February, Bickham said he planned to retire at the end of next year. 

“I have worked with John for three decades and at every turn, his knowledge, leadership and steady hand have not only contributed greatly to the success of the companies we led, but made a profound impact on the growth of our industry,” Rutledge said in a press release. “I am grateful that John will continue to serve Charter in this new capacity as a strategic advisor to me and the executive team, and his guidance will help ensure a successful transition for Chris into the COO role.”

Winfrey joined Charter as CFO in 2010 from German cable operator Unitymedia GmbH.  As COO he will oversee all of Charter's cable operations across its 41-state footprint, including field and customer operations, and retain management of marketing, sales, and Spectrum Enterprise. 

“Over the past 11 years Chris’ influence on Charter has expanded far beyond that of a typical CFO; he has been actively involved in our business operations and that deep knowledge, combined with his previous operational experience in Europe, will serve us well as Charter’s next chief operating officer,” Rutledge said in the press release. 

Fischer joined Charter in 2017 as a group vice president, and was promoted to EVP of finance in February.  As CFO, she adds oversight of Charter’s accounting, reporting and corporate budgeting and planning functions to her current responsibilities leading procurement, investor relations, internal audit, treasury, acquisitions and capital market activities and the tax and risk management functions. 

“Jessica’s leadership and financial expertise has benefited Charter for many years, both in her roles at Charter and while at EY where she was a key advisor during our 2016 transactions,” Rutledge said in the release. “In this role, Jessica will have an even greater impact on Charter’s success as we continue to seize the many opportunities before us.” 

DiGeronimo adds oversight for network and software operations to his current responsibilities as chief product and technology officer. He joined Charter in 2008 as vice president of product management and most recently added responsibility for Spectrum Reach, Charter’s advertising sales business, to his current position. Prior to Charter, DiGeronimo served as VP and general manager of the Cable Markets Group at Level 3 Communications. 

“With the expanded responsibility of Network Operations, Rich will both shape the customer experience and lead our network's critical evolution into the 10G future, delivering to our customers a superior broadband connectivity experience,” Rutledge said in the press release.  

Charter Communications chairman and CEO Tom Rutledge told analysts Friday that the cable company’s recent deal with ViacomCBS, especially its streaming component, was a "modern agreement" that reflects the changing video landscape, hinting that similar deals could be reached in the future. 

Charter said it reached a multi-year carriage deal with ViacomCBS on July 15, and though terms were not disclosed both companies said it included the ability for Charter to license ViacomCBS’ suite of streaming services, including Paramount Plus, Pluto TV, BET Plus and Noggin, for future distribution to Spectrum customers. 

“[I]t was a modern agreement, a new agreement and recognized that the video business is changing,” Rutledge said on a conference call to discuss Charter’s Q2 results.  “And it addressed our legacy relationship and addressed our new direct-to-consumer relationship with Viacom.”

ViacomCBS launched Paramount Plus in March and like other programmers, has looked to streaming services as the future of distribution. Viacom CBS said it had about 36 million subscribers to its streaming services at the end of the first quarter. 

The Charter deal seems to be in line with the general consensus that cable distributors, who now count on broadband service to drive most of their profit, want a deeper relationship with streaming services. Most already integrate apps from SVOD pioneers like Netflix, Hulu and  Amazon Prime into their set-top boxes. As more and more customers opt for broadband-only service -- Charter said its single play service penetration rose nearly two percentage points in Q2 to 45.7% from 44% in Q2 2020 -- operators are looking for additional content options to drive growth. 

Also Read: Streaming: It's Not a War, It's a Revolution

Rutledge said the streaming component to the  Viacom CBS deal was “integral to the discussion and consistent with our view that we'd like to be part of the marketplace and to enhance our video and customer relationship with customers through managing transactions for them.”

ViacomCBS has been working hard to improve the footprint of its streaming services. Reports surfaced earlier this month that chairman Shari Redstone and CEO Bob Bakish had informal meetings with Comcast chairman and CEO Brian Roberts about a possible partnership  involving international streaming. During Comcast’s Q2 results conference call July 29, Roberts didn’t confirm those meetings, but said he would be open to partnerships that promoted international streaming. Comcast’s NBCUniversal launched its streaming service -- Peacock -- nationally on July 15, 2020 In the second quarter, Comcast said Peacock had 54 million signups and 20 million monthly active users representing a 50% increase from the previous period. 

Rutledge also offered more insight into Charter’s seemingly uncanny ability to report stronger video subscriber results than its peers. Charter added about 56,000 video customers in 2020, while other operators struggled with increased losses. In the most recent Q2, the company lost 63,000 video subscribers, better than the 160,000 most analysts believed it would lose, and well behind the 399,000 losses endured by its closest peer, No. 1 cable operator Comcast. Rutledge said there is no secret formula to Charter’s video performance, just common sense. 

“We're selling more packages that allow us to tailor video to customer needs,” Rutledge said. “It's a difficult business because in general, video is very expensive. Our costs for video to provide it to customers are very high and continuously going up.”

Rutledge added although some consumers are priced out of the market because of the high cost of some traditional video packages, the alternatives are experiencing even higher churn.

“The new products that have been developed -- direct-to-consumer products -- are churning at higher levels,” Rutledge said. “And so our products also are in that re-adoption process of - that occurs as a result of churn.”

While that may make some think that the video business is stabilizing, Rutledge said the downward trend of the overall traditional video business can’t be ignored.  

“The fundamental trends haven't stopped, which is that prices are being continuously passed through to consumers, and there's real pressure on the total cost of the bundle,” Rutledge said. “The reason we're relatively better, we've been moderate with our pricing, and we've created new packages that cost less.” 

Charter Communications kept up the pace of Q1 broadband and wireless customers additions set by Comcast, reporting 355,000 high-speed data and 300,000 mobile subscriber adds in the period.

Both Comcast and Charter had cautioned investors not to expect the same growth the companies experienced in 2020, when pandemic-fueled stay at home orders drew record broadband growth. Better to compare this year to 2019, they said, and so far, that has proven to be a prudent choice.

Charter’s 355,000 data additions were behind the 582,000 it added in Q1 2020, but were closer to the 428,000 additions in the same period in 2019. Wireless customer adds of 300,000 were higher than the 298,000 customers added in Q1 2020, and nearly double the 176,000 additions in Q1 2019. Video subscribers declined by 138,000, more than the 70,000 lost in Q12020, but inline with the 145,000 shed in 2019. 

Also Read: Charter's 'Giffen Good'

Charter’s 355,000 data additions were behind the 582,000 it added in Q1 2020, but were closer to the 428,000 additions in the same period in 2019. Wireless customer adds of 300,000 were higher than the 298,000 customers added in Q1 2020, and nearly double the 176,000 additions in Q1 2019. Video subscribers declined by 138,000, more than the 70,000 lost in Q12020, but inline with the 145,000 shed in 2019.  

The broadband and wireless gains drove a 6.7% increase in total revenue to $12.5 billion, and a 12.5% increase in adjusted EBITDA to $4.9 billion.

“We continue to execute well in a market environment that has not yet returned to normal,” Charter chairman and CEO Tom Rutledge said in a press release. “We added 355,000 Internet customers in the first quarter, and 2 million over the last year, for year-over-year growth of 7.3%. "Our value-driven operating strategy of providing multiple high-quality products at lower prices than sold individually continues to drive our growth.”

Despite larger than expected losses on the video side, which helped trigger a minor sell-off in its stock on Thursday morning (Oct. 26), Charter Communications chairman and CEO Tom Rutledge stressed to analysts that the cable operator still has substantial room for growth.

Charter lost 104,000 video customers in the third quarter, more than twice the 47,000 it shed in the same period last year. The decline was in part responsible for a dip in Charter’s stock price early Thursday. The MSO has been one of the best performing stocks in the sector since it began its pursuit of Time Warner Cable in 2015, culminating in a purchase that transformed Charter into the second-largest cable operator in the country behind Comcast with about 16.5 million residential video customers.

Partly because of anticipation that it may buy more companies and partly because of the potential to grow subscribers inside its own footprint, Charter has been considered more of a growth stock than some of its larger peers. But some recent glitches around the integration of its Time Warner Cable and Bright House Networks systems over the past several months have cast some doubt on those growth prospects.

RELATED: Rutledge at Cable-Tex Expo extols platform, warns against 'poor service'

On a conference call with analysts Thursday to discuss third quarter results, Rutledge tried to ease any investor fears, stressing that Charter has plenty of mojo left.

“We still have a very rapidly growing good business,” Rutledge said on the call. “Yes, the video business has pressure in it and it has had pressure in it. We still think we can grow the video business going forward and expect to grow the video business going forward. And we expect to sell packaged products going forward including data, mobility, voice and video.”

Rutledge added that the pressures on the video business include pricing, and something he has spoken out against in the past – content providers that allow customers to share passwords for streaming services with non-subscribers.

“Many programmers now are distributors whether they know it or not,” Rutledge added, either through authenticated TV Everywhere platforms or streaming shows direct-to-consumer. But he stressed that allowing consumers to share passwords affects the price-value relationship of video.

“There is an enormous ability for people to receive free content because of the way content distributors are securing their product ineffectively,” Rutledge said. “As a result of that, I think you will see continued pressure on video. But we expect that we can still grow a rich video package inside our product bundles. We’ll think we’ll do that at the expense of our competitors and we think that the general category will continue to decline slightly.”

Rutledge continued that Charter is happy with the way it is pricing and packaging its products, adding that he believes the company has “an excellent growth trajectory based on our pricing structure.”

RELATED: Hurricanes drive Q3 video losses at Comcast

Charter lost about 90,000 video customers in the second quarter, an improvement over the prior year period and better than the 100,000 video customers it lost in Q1 2017. Rutledge has said in the past that he believed the company had turned the corner on subscriber defections as it has ironed out integration wrinkles in former Time Warner Cable systems. Despite what seems like an acceleration of those losses in Q3, Rutledge said he stands behind his words.

“We have turned the corner in terms of our operating strategy which will produce future revenue growth in excess of current revenue growth,” Rutledge said. “The way we know we turned the corner is we have more sales than we had year over year and we have less disconnects. That translates ultimately into more customers, higher quality customers, too, through time that produce revenue and produce net gains as well. Given the way we budgeted this business and the way we operate this business, it's almost exactly on the screws as to where we thought would be.”

Charter Communications CEO Tom Rutledge’s total compensation was relatively flat in 2015 at $16.4 million, just 2% higher than the $16.1 million he received in 2014.

For the most part, other Charter executives were in the same boat, with the total compensation of Charter’s five top executives up between 1% and 3%. Charter, which agreed to purchase Time Warner Cable and Bright House Networks last May, is close to receiving approval for the deal from the Federal Communications Commission, with chairman Tom Wheeler expected to circulate an order approving the merger to other commissioners to vote on as early as this week. 

Rutledge’s salary remained the same at $2 million in 2015, and he received stock awards of $999,925 for the year, down slightly from the $999,995 he received in 2014. Option awards were  $8.99 million for the year – in line with 2014 and Rutledge received $4.2 million in non equity incentives, up from $3.8 million in 2014.   

Chief operating officer John Bickham’s total compensation was up 1.2% to $8.7 million from $8.6 million in 2014, while chief financial officer Christopher Winfrey saw his total compensation rise 2.8% from $3.6 million in 2014 to $3.7 million in 2015. Rounding out the team, EVP and president, commercial services Don DeTampel received a 2.8% raise to $3.7 million from 3.6 million , and EVP and chief marketing officer Jonathan Hargis’ total compensation stayed even at $3.5 million.

Charter Communications CEO Tom Rutledge continued to beat the drum for his company’s $78.7 billion merger with Time Warner Cable, despite growing sentiment against the deal, telling an audience at an industry conference that the cable giant doesn’t need to raise rates to enjoy double-digit revenue growth.

Charter first announced its intention to purchase TWC in May, but has increasingly come under fire from critics who have warned the combined company would create a broadband duopoly with Comcast and dominate high-speed Internet service. Last night (Feb. 29) Senate Minority Leader Harry Reid sent a letter to the Federal Communications Commission expressing concern about the new Charter-Comcast duopoly.

“Growing customers is the key to our future,” Rutledge said at the Morgan Stanley Technology, Media & Telecom conference in San Francisco. “We have not been a rate-driven revenue driver business; we’ve been a customer-creating business.”

Rutledge said rate increases made up less than 2% of total revenue growth last year and that Charter has grown video customer penetration from 33.9% in 2013 to 34.7% in 2015 by building a high-quality, service-oriented infrastructure. The idea is to expand that philosophy to Time Warner Cable and Bright House Networks.

“Our objective is to take those assets, invest in them, and put a 2-way interface on every outlet,” Rutledge said. “We’re doing fine in Charter, we’ve continued to accelerate, and I think be able to get the new assets doing the same thing.”

He added that despite some recent noise, Charter has been working with both the FCC and the states to work out any issues concerning the combination and that Charter is “reasonably confident” the deals will pass regulatory muster.

Charter Communications said in a Securities and Exchange Commission filing Friday that it has extended the employment contract of CEO Tom Rutledge for one year to Feb. 13, 2017. Rutledge’s original deal was set to expire on Feb. 13, 2016.

Rutledge joined Charter in 2012 after nearly a decade as chief operating officer of Cablevision Systems. In 2015, the company reported its first full year of video subscriber growth in more than a decade.

According to the filing, as part of its agreement with the Advance/Newhouse Partnership to purchase Bright House Networks, the company intends to offer Rutledge the positions of chairman and CEO with a new five-year employment agreement after that deal is closed.

In a separate development, a California Administrative Law Judge moved up the timeline for that state’s Public Utilities Commission to decide whether to approve Charter’s pending $78.7 billion purchase of Time Warner Cable.

The California PUC had earlier issued a timetable that suggested it would decide whether to approve the deal in June. On Feb. 11, ALJ Karl J. Bemesderfer  shortened the timetable for the proceeding by a month. A proposed decision now is scheduled for April 12, with the final decision due May 12.

The California PUC was believed to be the main roadblock in getting the deal approved by the end of the first quarter. While that still won’t happen with the amended timetable, it does suggest that the deal could be closed sooner than was previously expected.

The New York Public Service Commission approved the deal in January. The Federal Communications Commission, which still must sign-off on the deal, restarted the informal 180-day shot clock on the approval process on Jan. 25.

Charter Communications CEO Tom Rutledge, never a fan of subscribers who share their TV Everywhere passwords with family members outside of their homes, said that practice, especially with college students, is cutting into pay TV subscriber growth results.

While he said that lower household incomes are a big factor in the decline of overall pay TV subscriber rolls -- people simply can't afford pay TV -- Rutledge added that service theft is becoming an increasingly important problem.

“A lot of the TV Everywhere product and other products available online is not secured well,” Rutledge said. “You have people joking about sharing passwords and authentication on award shows. That ‘s a real issue.”

Rutledge pointed to the college market, where Charter has been successful in selling data-only to students, but not so much video because they are using their parents’ authentication passwords to get video for free.

“The lack of control over the content by content companies and the authentication processes has reduced the demand for video because you don’t have to pay for it,” Rutledge said. “Because of our sales techniques, we’re actually growing. But there is a trend there that is negative that is associated with the lack of authentication processes.”

Charter finished the third quarter with 12,000 basic video subscriber additions.

Later, Rutledge said a lot of the video theft blame rests on content providers, who have encouraged consumers to watch via their own apps.

Rutledge said that by allowing consumers to access their content for free, programmers are lowering its overall value.

“At a core level they haven’t been in that business before and haven’t really thought through what they’re doing,”  Rutledge said of content companies.  “Now they are sending their signal out themselves and they don’t seem to have thought through what the implications of that are and they have created a problem where they have devalued their own product. It’s a real issue.”

 The Charter CEO kept it simple when explaining why the company has managed to grow video customers while competitors have seen their growth slow.

“The competition continues to aggressively promote products at lower price points,” Rutledge said. “We think fundamentally we have better products than they do.”

Charter is moving forward with its planned purchases of Time Warner Cable and Bright House Networks and still hopes it can close the deal by the end of the year. Rutledge didn’t have many details to give on the process, but said once the deal is done, Time Warner Cable systems will likely follow Charter’s pricing regime, which could mean the elimination of modem fees and a lowering of set-top box charges.

“We would tend to go toward our pricing model,” Rutledge said in response to a question about the set-top and modem charges. Time Warner Cable raised some hackles when it first implemented the fees in 2011 for new customers, extending the charges to include existing subscribers in 2012. The company increased the fees in most of its markets from $3.95 per month to $5.95 per month in 2013. 

He added that Charter is interested in participating in the upcoming broadcast spectrum auction, but that the company has made no firm decision.

“We’re interested in it,” Rutledge said. “We are in a very awkward situation given the pendency of our deal [with Time Warner Cable and Bright House] to be able to participate in that. But we are exploring it.”

Charter Communications continued cable’s streak of improved basic video customer growth, adding 12,000 customers in the third quarter, its first positive growth quarter since Q4 2014.

Charter also increased high-speed data customer additions, adding 131,000 in the period versus 94,000 additions in the same period last year. Telephony customer additions also increased to 37,000 in the quarter, compared to 29,000 additions in the prior year.

"Clearly, 2Q15 was not a negative inflection point for the industry, and this morning's results from Charter and Time Warner Cable validate this thesis of ours," analyst Vijay Jayant, of Evercore ISI, said in a note to investors. Pay TV operators struggled in the second quarter of this year, raising fears of a spiral of subscriber losses (see Kagan: Cord-Cutters Drive Pay TV Losses To 625K). Craig Moffett, of MoffettNathanson, commented in part: "It’s time to change the narrative about cord cutting."

Overall residential customer relationships grew by 97,000, with triple play sell-in improving year-over-year to 63% of total residential video sales, the company said. Residential primary service units (PSUs) increased by 180,000 versus a gain of 114,000 in the prior-year period.

The customer gains translated into improved financial results. Revenue in the period was up 7.2% to $2.45 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 8.5% to $850 million.

“Our accelerating customer and PSU growth is being driven by our successful efforts to transform Charter into an organization that delivers outstanding products, service and customer value,“ CEO Tom Rutledge said in a statement. "Our operating strategy, which includes continued investment in superior products at attractive price points, with a highly-skilled US-based labor force, has accelerated our customer growth, leading to faster EBITDA growth and free cash flow generation. We look forward to applying the same strategy across our larger footprint, following the close of our Time Warner Cable and Bright House transactions, driving greater value for customers and shareholders.”      

Charter Communications named Time Warner Cable commercial services chief Phil Meeks as executive vice president and president of Business Enterprise Services, effective after its planned merger with the cable company is completed.

Meeks is currently EVP and chief operating officer of Business Services at TWC. An industry veteran – he joined TWC in 2013 after about five years as senior vice president of Cox Business – Meeks will oversee all aspects of Charter’s business enterprise unit.

Charter agreed in May to purchase TWC in a deal valued at about $78.7 billion. That transaction, currently winding through the regulatory approval process, is expected to close by the end of the year.

“Phil’s knowledge and understanding of the commercial telecommunications industry is all encompassing,” Charter CEO Tom Rutledge said in a statement.  “With a proven track record of success, Phil’s leadership will be instrumental to the continued growth of our enterprise business.”

At TWC, Meeks leads its rapidly growing business services unit, serving over 650,000 business customers and accounting for over $3 billion in annualized revenue. At Cox Business he led 3,500 employees in making it the fastest growing business unit in the enterprise.

Meeks has a long history in the telecom business outside the cable industry as well, serving 20 years in various strategy, sales and account management roles during 20 years at MCI Telecommunications and starting  his career at AT&T Information Systems/Southern Bell in 1979.

In addition, Charter named former long-time ad sales executive  David Kline and former PepsiCo executive Paul Marchand as EVP and president of Media Sales and EVP of Human Resources, respectively.

Kline has spent more than 33 years in the ad business, most recently as president and chief operating officer at Visible World. Prior to Visible World, Kline served as chief operating officer of inertactive TV company Ensequence and had served for 14 years as president and chief operatig officer of Cablevision Media Sales.

“David is an industry veteran with over 30 years of knowledge and experience in his field,” Rutledge said in a statement.  “David’s strategic leadership will further elevate Charter’s position as an innovator in the advanced TV advertising space.”

Marchand is a 12-year veteran of PepsiCo, most recently serving as Senior Vice President of Human Resources for the North America Beverages Field and Supply Chain organization. In addition to several other previous management roles at PepsiCo, Marchand also has held human resources positions at Merrill Lynch, JPMorgan and the May Department Stores Co.

“Paul is a seasoned and strategic leader with over 20 years of experience in Human Resources,” Rutledge said in a statement.  “His proven ability to attract, develop and retain the very best talent will be a tremendous asset to Charter moving forward and I am pleased to welcome Paul to our executive team.”

All three executives will report directly to Rutledge and will be based at Charter’s Stamford, Conn., corporate headquarters.

Charter Communications CEO Tom Rutledge said cable could go a long way toward solving its customer service problem by simply reducing the number of actual face-to-face interactions with customers and helping them solve their problems remotely.

“The inherent problem in all of cable, and always has been, is you have to schedule a job with a person who doesn’t really want you to come to their house and you have to do work of an indeterminate length of time and get to the next job on time,” Rutledge said at the Guggenheim TMT Symposium in New York. “That’s inherently difficult. And all of the business that do that -- plumbers, contractors – everybody can’t stand them, because it’s a difficult transaction to manage. The more you can take that out of the business, the higher the satisfaction goes, just inherently.”

Charter, he said is moving toward that future by putting more functionality in the cloud – its user interface for example, is backward compatible and works with a number of different set-top boxes.

“We want to put advanced user interfaces in all of our customers’ homes and not just in their homes but every outlet they have a TV connected to and every device that they have that they could watch video on," Rutledge said. "We can be state-of-the-art without a physical transaction.”

The Charter chief also had some thoughts on stricter federal regulation in the wake of its $78.7 billion agreement to purchase Time Warner Cable. That deal, expected to close by the end of the year, has yet to begin the regulatory approval process.

Rutledge said he agrees with the basic tenet of net neutrality. But he said that many of the concerns that former FCC chairman Julius Genacowski managed to alleviate through Title I, current FCC chairman Tom Wheeler is seeking to remedy through Title II.

“We agreed with Julius as an industry and as a company with the Title I net neutrality requirements that he wanted us to embrace,” Rutledge said. “Those are the same ones that Tom Wheeler is trying to get using Title II. We embraced the idea of openness to the Internet and everyone having an opportunity, without throttling, without prioritization to use the two-way interactive capability that broadband provides, We were not happy with Title II because of the inability to determine exactly how it will all unfold.”

Rutldge added that Wheeler and Genachowski’s objectives are basically the same, just that Wheeler is going to manage them differently because the process is now largely complaint-driven.

But he added there is a movement afoot that could bring more clarity to the situation.

“Legislation could be passed that would limit net neutrality to a particular set of facts and the risks of other kinds of regulatory creep through Title II; I would prefer that,” Rutledge said.

But Rutledge stopped short of predictions.

“I don’t know if it’s not possible or possible,” Rutledge said. “It’s still being worked on.”   

EARLIER:Reports: Charter Near Deal to Buy Time Warner Cable

Charter Communications has agreed to purchase Time Warner Cable in a cash and stock deal valued at $78.7 billion, just weeks after the second largest cable operator in the country watched its deal with Comcast crumble amid growing regulatory opposition.

Charter, which began pursuing Time Warner Cable about two years ago, finally snagged the prize, agreeing to pay $100 per share in cash and 0.5409 shares of Charter stock. The deal values Time Warner Cable at $195.71 per share based on Charter’s closing price on May 20, or $200 per share based on Charter’s 60-trading day volume average price. TWC shareholders can opt to take $115 in cash and 0.4562 shares of Charter stock.

Comcast terminated its $67 billion merger with TWC on April 24, 14 months after agreeing to merge with the company, after it became clear regulators would not approve the deal. Charter, which has substantially fewer customers than Comcast, is expected to have an easier go at it during the regulatory aproval process.

At the same time, Charter agreed to purchase Bright House Networks for $10.4 billion, another deal that has been in the works for a while. Combined, the deals will give the combined companies 23.9 million customer relationships, or about 14.8 million video customers. 

Liberty Broadband, the tracking stock that holds about 25% of Charter shares, has agreed to purchase about $5 billion in newly issued shares of the combined company.

The deal, expected to close by the end of the year, is a substantial premium to the Comcast deal, which valued TWC at more than $158 per share.

When the dust settles, TWC shareholders will own between 40% and 44% of the new company (depending on which option they take).

In a statement, Charter said the deal will result in faster broadband speeds, greater deployment of WiFi and more advanced services.

“The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry. Representatives of each of these companies have invented some of the most revolutionary communications products ever created; innovations like video on demand, VOIP phone service, remote storage DVR, cable TV through an app, downloadable security and the first backward-compatible, cloud-based user interface. That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies,” said Charter CEO Tom Rutledge in a statement. “With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based WiFi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace. New Charter will capitalize on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.”

Rutledge will serve as CEO and a board member of the new company, which will have a 13-member board of directors. The remaining 12 directors will include seven independent directors nominated by the independent directors serving on Charter’s Board of Directors, two directors designated by Advance/Newhouse, and three directors designated by Liberty Broadband. Charter’s current chairman, Eric Zinterhofer, will continue to serve on the new company’s board.

“With today’s announcement, we have delivered on our commitment to maximizing shareholder value,” said TWC’s chairman and CEO Robert Marcus in a statement. “This agreement recognizes the unique value of Time Warner Cable, and brings together three great companies that share a common philosophy of strong operations, great products, robust network investment and putting customers first. This combination will only accelerate the great operating momentum we’ve seen over the last year and provide enormous opportunities for our 55,000 dedicated employees. We remain wholly committed to bringing the very best experience to our residential and business customers coast to coast.”

Bright House CEO Steve Miron seemed equally pleased.

“Today’s announcement is good news for customers and potential customers, as well as our employees, since we will be in a stronger position to deliver competitive services, invest in advanced technology, and develop innovative products that will compete with global and national brands,” Miron said in a statement. “In addition, I am very pleased that Tom Rutledge will be the CEO of the new company. Tom recognizes the importance of placing a high priority focus on customer care drawing from the expertise of all three companies, and I believe this will be a strong pillar of the new company’s culture.”

The ongoing soap opera between Charter Communications, Time Warner Cable and Bright House Networks entered its second act Friday after Charter CEO Tom Rutledge confirmed that the company is in talks with Bright House Networks, adding that the Connecticut-based cable operator also is exploring ways to integrate over-the-top offerings into its existing and future bundles.

On a conference call with analysts to discuss first-quarter results May 1, Rutledge confirmed reports that Charter was in talks with the 2-million subscriber MSO.

“Our agreement with Advance Newhouse requires that we negotiate in good faith upon the termination of the Comcast transaction, and we’re doing that,” Rutledge said on the call. He declined to elaborate.

Charter had agreed to purchase Bright House in March in a deal valued at $10.4 billion, but that transaction was contingent on Comcast’s $67 billion purchase of Time Warner Cable being completed.   Comcast’s decision to terminate that deal on April 27 also scuttled the Bright House transaction as well.

While Charter was expected to revisit the Bright House transaction, Time Warner Cable also has the right of first offer for the cable operator and reports have claimed it too is in preliminary discussions with the company as well.

In a research note, Telsey Advisory Group media analyst Tom Eagan has suggested Time Warner Cable could buy  Bright House as a defensive play to discourage Charter from making a second attempt at acquiring the larger operator.  

On the call, Rutledge said that Charter also was investigating whether it could devise new video packages that include direct-to-consumer offerings like Netflix, Hulu and HBO Now.

“We’ve been considering ways to provide compelling services and packages at lower retail price points and with a lower content cost structure and with the inclusion of direct to consumer services all in an offering that satisfies the unserved marketplace,” Rutledge said. “If we can create a new video product that offers real value to this segment we target and that customers will stick with, that also  gives us an opportunity to upgrade customers to our full featured video product as consumer needs change, and obvious we will do it if we can. We haven’t found that product mix yet and we don’t think anyone else has either.”

Later, Rutledge explained that he meant developing offerings that include over-the-top services like Netflix, HBO Now, Hulu and others like that where the purveyor of the content has a direct relationship with the consumer.

“Our view is that we can mix those products into products we sell to satisfy the customers entire video needs,” Rutledge said. “I am assuming that products can be built that would be sold by us within our footprint, but would also include products sold outside our footprint delivered by the Internet, generally but not necessarily.”

Charter Communications CEO Tom Rutledge alluded to the deal that got away at the Goldman Sachs Communacopia conference Wednesday, but added that second prize in the battle for Time Warner Cable – sales, swaps and spins that will double the size of his company – is ample consolation.

Charter spent the better part of 2013 pursuing Time Warner Cable, but ultimately lost out in February of this year when Comcast – at one time a proposed partner in a Charter-TWC combination – swooped in with an all-stock deal valued at about $69 billion.

But the loss of TWC was softened by a series of transactions that will effectively add about 5 million subscribers to the Stanford, Conn.-based MSOs, through sales, swaps and a 33% interest in a separately publicly traded company, dubbed GreatLand Connections.

“Well, I had another deal in mind and this was the best I could do and it's a good deal,” Rutledge said at Communacopia. He added that in addition to doubling its footprint, the deal concentrates Charter’s operations more tightly allowing it to mass market to practically its entire footprint at once as opposed to just 48% currently.

Rutledge said the company is already working through the regulatory process – it met with Comcast Cable CEO Neil Smit and his team recently to discuss transition service agreements.

“Our goal is to close the deal as quickly as possible,” Rutledge said.

Rutledge offered some further insight to the company’s relationship with GreatLand, adding that in some markets, it will co-brand service with its own Spectrum moniker.

“I think in certain markets, we'd bring Spectrum services by GreatLand and the products set will be similar or if not identical from what a customer experiences regardless of which cable footprint they live in,” Rutledge said. “When we market it and take a sale, the customer will get a bill from GreatLand if they're in a GreatLand area; they'll get a bill from Charter if they're in a Charter area, but the experience of buying Spectrum services will be uniform.”