Comcast has made its move to transfer its Minneapolis cable customers to a new franchise as part of its proposed merger with Time Warner.
Comcast, which holds the sole franchise rights for cable in Minneapolis, has requested to spin-off its rights to a new company called GreatLand Connections, according to a request made to the City.
The move is being taken as a result of the cable giant's proposed mega-merger with Time Warner. Under the terms of the merger, Comcast will not be allowed to have more than a 30 percent share of the United States' pay-TV market.
Comcast and Time Warner would own a 67 percent stake in GreatLand Connections in order to dilute its share of the market, but the company will be managed by Missouri-based Charter Communications, which Zacks.com reports will own the remaining 33 percent.
Around 2.5 million customers in the Midwest are expected to transfer to GreatLand.
Deal with city adds 36 cents a month to cable bills
The same request has been made to other cities across the country, but MPR notes that the City of Minneapolis has driven a hard bargain in order to give its blessing to the merger.
In exchange for the switch to GreatLand Connections, the City will get an extra $250,000-a-year for public access programming – paid for by a 36 cent hike in cable bills.
Furthermore, free basic cable will be rolled out in 30 of the council's municipal buildings over the next seven years, worth $50,000, while Comcast will also hand over $40,000 in underpaid fees.
The Star Tribune notes though that the franchise rights in Minneapolis are not exclusive, and that Comcast is facing a challenge from CenturyLink, which earlier this month announced its intentions to seek a cable franchise in the city for its Prism TV service.