There have been a number of high-profile, blockbuster mergers in our industry over the past few years, and every one of them has promised to "revolutionize the way we watch TV," "create synergies never before dreamed of" and "reduce costs while increasing the level of customer service." Oh, yeah??

I am still waiting for each one to deliver on those promises.

In the past few years we have seen TCI and MediaOne unload their portfolios to AT&T. We watched Cox absorb TCA Cable. We saw Charter acquire Marcus Cable and Falcon Cable to name a few. Then, Time-Warner merged with AOL and on and on…

Oh, and recently, second-tier operators such as Insight and MediaCom have been plucking off unwanted pieces of AT&T and ComCast.

But have these mergers created any value in our market segment? Has it addressed the problems occurring among franchise cable operators and MDUs? Are we better off today after this period of merger mania?

These are valid questions to ponder, as we're about to go through another wave of consolidation and blockbuster "change-the-world" mergers. This latest round began after the announcement of EchoStar and DirecTV combining forces, and then ComCast's bid for AT&T Broadband, which put that company into play. There are likely to be more announced during 2002.

We are headed toward fewer, larger, more dominant players who are getting further and further away from the MDU marketplace. And this process is only continuing.

Some property owners (especially those that read the press releases in the Wall Street Journal) may be excited about the revolution, the new synergies and the elevated service created from these large transactions. But recent history suggests that the only "revolution" going on is the change of color on service vans and the logos on billing statements. Synergies and service improvements are a pipe dream during the euphoria phase after a merger announcement.

I don't get why these mergers generate so much fuss. Each one is designed to please Wall Street, and does nothing to please MDU Main Street.

And, merger announcements include the most ridiculous claims. Business news channels go nuts over the possibilities, and journalists begin touting all kinds of new products and ideas, and the creative juices start flowing. But, has your TV viewing experience really been altered from one of these mind-boggling deals? (Of course the "mind-boggling, experience-changing" ideas are still in the testing stage in unknown small towns in Kansas and Illinois). Oh, geez!

A couple of years ago, AOL announced that it was acquiring Time-Warner. Senior management touted all of the great benefits between the on-line company and the content side of the business, and how it will continue to enhance the cable customer's experience with Time-Warner. Enhance the price? Yes. Enhance the length of time to connect service? Yes. Enhance the "experience"? Not at all.

Mega-mergers are a natural part of a maturing industry, and I believe that they can be beneficial in many respects. But I've always been concerned by the hype that is sold to the real estate community shortly after a new merger is announced. It causes property owners to stop and wait for a while to see if this time things actually get better. They are concerned about closing deals with PCOs, and sometimes they too can get caught up in all the fuss.

Only to be disappointed again.

After all, these mergers take each giant cable operator further and further away from the local market. They get rid of local MDU coordinators, and replace them with national MDU coordinators. They centralize activity to their corporate offices, and promise a new appreciation and understanding of the MDU market segment. Time and time again, they never deliver any of the hype promised to MDU owners.

This creates a great opportunity for private cable operators. As these mergers move companies further and further from the customer, we can get closer and closer to our customer. At the end of the day, MDU owners appreciate that, even if they seem cautious during merger moments.

Maybe the revolutions, synergies and service enhancements will ultimately come from the PCO side of the business!

About the author
Bryan Rader is president of MediaWorks in Atlanta, one of the fastest-growing telecommunications provides serving multiple dwelling unitsin the Southeaster United States.