The FCC’s Wireline Competition Bureau has greenlit Charter Communications’ $34.5 billion acquisition of Cox Enterprises’ residential cable, commercial fiber, and managed IT and cloud businesses.
First announced in May, the deal will create a Wi-Fi and cable giant. The combined entity will take the Cox name and use the Spectrum brand name within a year after closing, becoming the largest residential Internet service provider in the market. Charter will now indirectly control Cox’s residential broadband, video, mobile and voice businesses, its advertising and enterprise businesses and its Segra, UPN and RapidScale businesses. The combined company will remain headquartered in Stamford, Connecticut, and will maintain a significant presence on Cox’s Atlanta campus.
“By approving this deal, the FCC ensures big wins for Americans,” FCC chairman Brendan Carr said in a statement. “This deal means that jobs are coming back to America that had been shipped overseas. It means that modern, high-speed networks will get built out in more communities across rural America. And it means that customers will get access to lower priced plans.”
The FCC said the move would bring “greater connectivity and economic opportunity to rural America,” noting that Charter would invest billions of dollars to upgrade its network and deliver high-speed service to homes and businesses across the country, leading to faster broadband and lower prices. Charter’s Rural Construction Initiative is also activating new services across rural states, which the agency said can bring better service and job opportunities to rural America.
Charter has also committed to onshore all of the job functions currently handled off-shore by Cox within 18 months, matching its own longstanding commitment to a 100% U.S.-based customer sales and service employee workforce. It has also committed to extending its industry-leading jobs practices, including a $20 per hour minimum starting wage to Cox workers. All employees receive full benefits, including Trump accounts and opportunities for investment and growth.
Additionally, the FCC noted that Charter committed to new safeguards to protect against “DEI discrimination” and has reaffirmed the merged entity’s commitment to equal opportunity and nondiscrimination. Specifically, Charter committed to recruiting, hiring and promoting individuals based on skills, qualifications and experience, the agency said.
During its fourth quarter earnings call last month, Charter executives said that Spectrum would cover 70 million households, giving it additional scale to develop new products and services, serve more business customers and save customers money.
The company also moved its post-merger target leverage to the low end of a range of 3.5 to 3.75 times, which it expects to complete within three years following closing, and said it would continue to offer “significant ongoing capital returns to shareholders” and “generate very meaningful and growing levels of free cash flow.”
“We’re honored that the Cox family has entrusted us with its impressive legacy and are excited by the opportunity to benefit from the terrific operating history and community leadership of Cox,” Chris Winfrey, Charter president and CEO, said in a statement when the merger was announced. “Cox and Charter have been innovators in connectivity and entertainment services – with decades of work and hundreds of billions of dollars invested to build, upgrade, and expand our complementary regional networks to provide high-quality Internet, video, voice and mobile services.”
“Our family has always believed that investing for the long-term and staying committed to the best interests of our customers, employees and communities is the best recipe for success,” Cox Enterprises chairman and CEO Alex Taylor added.
