Charter Cable is getting the government’s help to raise $150M to invest in its network
Charter Cable, the largest cable company in the United States, is raising $150 million to invest and expand its network in the wake of the federal government’s decision to withhold federal subsidies that allow Charter to offer its own video services.
Charter said Tuesday that it would spend $30 million to improve its network, which has long struggled to compete with rival Comcast and DirecTV.
It will invest $150.6 million to expand its video service, which now offers cable packages with speeds of up to 25Mbps to more than 6 million homes in the Southeast, according to a release from the company.
The move is in response to a federal ruling by the Federal Communications Commission that Charter should pay its own way to provide its own TV service.
Charters latest move comes as Charter faces growing competition from the likes of Comcast and the company’s own video service Netflix.
Comcast and AT&T are now offering their own video packages to subscribers, while Direcision and Time Warner Cable are also offering video packages.
Comcast is also getting into the live TV business, with Direcisions Direcord Now service.
Charter’s own services are also available via streaming video services such as Netflix.
Chronicle columnist David Sirota, a critic of the FCC ruling, pointed to Charter’s move as a way to make up for a $1.9 billion loss last year on its cable business.
Charter CEO Tom Rutledge said that $1 billion loss would not have happened if Charter had not invested in its own network.
“Charter has taken the unprecedented step of investing $150 billion in its core network to improve the experience for consumers and create a better value for shareholders,” Rutledge wrote in a statement.
Charybdis has been seeking a $150-million investment to help it expand its service to more people, as well as to buy out Comcast’s cable operations and acquire Time Warner and Charter’s media assets.