Charter Buys 32K Subs from Cable USA

Charter Communications Inc. made its second cable-systems acquisition in three weeks when it bought properties in Colorado, Minnesota and Nebraska with 32,000 subscribers from Cable USA.

The $99.5 million deal fleshes out other Charter operations-mainly in Nebraska, where Charter will add about 29,000 subscribers as a result of the purchase.

At that price, the deal works out to be worth about $3,100 per subscriber.

On Feb. 28, 6.9-million subscriber Charter bought 524,000 net subscribers from AT&T Broadband for $1.8 billion in stock and cash.

The Cable USA deal is expected to close by the second or third quarter, pending regulatory approvals.

Charter, the No. 4 domestic MSO, already has about 65,000 customers in Nebraska, said spokesman Andy Morgan. "This [acquisition] follows the path of the systems we have."

Charter picks up systems in six communities in Colorado, four towns in Minnesota and 46 communities in Nebraska.

The Cable USA systems range from 300 megahertz to 550 MHz in capacity, Morgan said. Charter expects to spend about $17 million to upgrade them over the next two years.

Morgan said that once those upgrades are completed, about 65 percent of customers served in Nebraska will be at 870 MHz capacity, 21 percent at 750 MHz and 8 percent at 550 MHz. The remainder of the systems will stay in the 450 MHz to 550 MHz range.

Russ and Lisa Hilliard founded Cable USA in 1970. Chris Hilliard serves as president. The Hilliards will have no role in the Nebraska, Colorado and Minnesota systems after the sale is completed.

Cable USA also provided local and long-distance phone service in Nebraska through a leased switch. Morgan said Charter has not yet decided whether or not to continue offering phone service.