Comcast/at&T Merger
Comcast and AT&T:
A Cable-Industry Merger
The Cable Industry of the 1990s, and Comcast’s/AT&T’s Places Therein
From 1990 to 2001, the cable industry was compelled to almost completely restructure; buffeted by forces both internal and external, cable operators were forced to make drastic changes in the name of survival.
Influences at play in the early 1990s were only augmented when Congress passed the Telecommunications Act of 1996, allowing “competitive distribution technologies…to compete with traditional cable and direct satellite broadcast in what had been an exclusive industry;” as a result, the industry engaged in a frenzy of investment and consolidation. Operators with the means began to upgrade their networks to provide high-speed Internet, telephony, and digital cable via broadband, as well as value-added services like video-on-demand and interactive TV; those left out were forced to consolidate or face elimination. Consequently, the top eight cable operators went from controlling approximately 53% of the industry in 1990, to 79% in 2001.
Comcast thrived during this period, aggressively acquiring assets to increase in size from 2.3 million subscribers to 8.5 million. Throughout this expansion, the firm gained a reputation as “arguably the industry’s best operator” due to its avoidance of burdensome debt levels and its focus on developing its subscriber base.
Some firms, however, were unable to proceed as successfully as Comcast. While AT&T was one of the pre-1995 world’s largest telecomm companies, it underwent a major breakup to transform itself from a long-distance phone company to an integrated voice and data communications company. Spending over $100 billion to facilitate this evolution through acquisitions and upgrades, AT&T Broadband became the United States’ largest cable company. By 2000, however, in an industry rocked by multiple acquisitions, a long distance price war, slow adoption of new technologies, and dried
A Cable-Industry Merger
The Cable Industry of the 1990s, and Comcast’s/AT&T’s Places Therein
From 1990 to 2001, the cable industry was compelled to almost completely restructure; buffeted by forces both internal and external, cable operators were forced to make drastic changes in the name of survival.
Influences at play in the early 1990s were only augmented when Congress passed the Telecommunications Act of 1996, allowing “competitive distribution technologies…to compete with traditional cable and direct satellite broadcast in what had been an exclusive industry;” as a result, the industry engaged in a frenzy of investment and consolidation. Operators with the means began to upgrade their networks to provide high-speed Internet, telephony, and digital cable via broadband, as well as value-added services like video-on-demand and interactive TV; those left out were forced to consolidate or face elimination. Consequently, the top eight cable operators went from controlling approximately 53% of the industry in 1990, to 79% in 2001.
Comcast thrived during this period, aggressively acquiring assets to increase in size from 2.3 million subscribers to 8.5 million. Throughout this expansion, the firm gained a reputation as “arguably the industry’s best operator” due to its avoidance of burdensome debt levels and its focus on developing its subscriber base.
Some firms, however, were unable to proceed as successfully as Comcast. While AT&T was one of the pre-1995 world’s largest telecomm companies, it underwent a major breakup to transform itself from a long-distance phone company to an integrated voice and data communications company. Spending over $100 billion to facilitate this evolution through acquisitions and upgrades, AT&T Broadband became the United States’ largest cable company. By 2000, however, in an industry rocked by multiple acquisitions, a long distance price war, slow adoption of new technologies, and dried