Please ensure Javascript is enabled for purposes of website accessibility

Will 2016 Be Time Warner Cable Inc.'s Best Year Yet?

By Daniel B. Kline - Jan 12, 2016 at 4:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In the coming year, the company will go away, and that may be the best thing for it.

Sometimes a company, no matter how hard it tries, simply cannot escape its past.

For example, even if the big tobacco companies open up orphanages and start sponsoring soup kitchens and homeless shelters, few people would overlook their past sins. There are simply some brand names that are so associated with negative behavior, practices, and customer service, that no amount of fixing things will ever remove the taint.

Time Warner Cable (NYSE: TWC) is one of those brands. It's a company known for monopolistic practices, customer indifference, and generally being well aware that its subscribers had few, if any, other options. That has led to such delightful scandals as this one, where the company changed a subscriber's name on her bill to a word we can't (and don't want to) print here. That's only one example from a company whose brand has become hopelessly intertwined with treating people badly.

Time Warner Cable is literally one of the least-liked companies in the two least-liked industries, according to the most recent American Consumer Satisfaction Index report. The cable and Internet provider came in dead last as a pay-television provider, and fourth from the bottom as an ISP.

That reputation may be very hard to live down, and Time Warner Cable is lucky because it won't have to. This may be Time Warner Cable's best year yet, because it's most likely the year the company will cease to exist.

Time Warner Cable has a customer service presence on social media that seems to mostly acknowledge when service is out. Source: Time Warner Cable's Twitter feed. 

What is happening?
Time Warner Cable is in the process of being purchased by Charter Communications
(CHTR -2.49%) in a deal that values TWC at $78.7 billion. When that happens, both companies will disappear and a new entity, not-so-cleverly called "New Charter" will emerge. It's a big deal that also involves Charter also acquiring Bright House to create a company that will serve 23.9 million customers in 41 states, according to a press release.

If the deal receives regulatory approval, the Charter folks, who will be in charge, said that they plan to "drive investment into the combined entity's advanced broadband network, allow for wider deployment of new competitive facilities-based WiFi networks in public places, and the footprint expansion of optical networks to serve the large marketplace of small and medium sized businesses." That, they claimed, will give subscribers faster Internet, better cable, and more HD channels.

They stop short of saying it will deliver a unicorn in every backyard and a pot of gold under every rainbow, but it's more or less implied that the deal be good not just for subscribers, but for humanity as a whole.

"New Charter will capitalize on technology to create and maintain a more effective and efficient service model," said Charter CEO Tom Rutledge. "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."

It's a message to the Federal Communications Commission, which must approve the deal, that bigger is better, so please let us be bigger. It's hard to argue that anything won't be better than Time Warner Cable in the public's eyes.

It's not that hard to say goodbye
Sometimes it's sad to see a long-standing brand disappear. This is not one of those times.

Even fairly lousy companies of the past like Eastern Airlines, MCI Worldcom, and Pets.com all bring back some pleasant, or at least amusing memories. TWC will instead leave behind a legacy of raising prices, poor customer service, and 4- to 8-hour appointment windows where the technician somehow ends up being late anyway.

Though it might have been better for both companies to leave behind the Charter name along with Time Warner Cable, New Charter will be a new start. It's a break with the old for TWC customers and a second chance for the company to make a first impression.

The cable industry has a poor track record, but perhaps Charter has learned, and in disappearing, Time Warner Cable will have its best year ever.

Daniel Kline has no position in any stocks mentioned. He once had a cable appointment with an eight-hour window where the technician never showed up and the company rebooked another eight hour appointment which it was late for. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Charter Communications, Inc. Stock Quote
Charter Communications, Inc.
CHTR
$452.50 (-2.49%) $-11.55

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
379%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.