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Charter buys Fanch Communications

Paul Allen's closely held Charter Communications, which just bought Falcon Cable for $3.6 billion, announces it will acquire cable operator Fanch Communications.

Billionaire investor Paul Allen's cable empire is expanding daily--literally.

Allen's closely held Charter Communications, which bought Falcon Cable yesterday for $3.6 billion, today announced it will acquire Denver-based cable operator Fanch Communications.

The acquisition of privately held Fanch will add about 550,000 subscribers to St. Louis-based Charter, making it the country's fourth-largest cable operator with 5.5 million customers. Fanch has customers in West Virginia and Pennsylvania.

"The Fanch Communications systems have the foundation for both digital cable and broadband and are quality additions to the wired world Paul Allen and Charter are building," said Charter chief executive Jerald Kent in a statement.

Although the deal's financial terms were not disclosed, people close to the transaction told the Wall Street Journal it is valued at just more than $2 billion.

Allen, a Microsoft cofounder, has been on a tear, moving aggressive to bolster his cable empire since he first acquired Charter last year. Allen--along with AT&T, Microsoft, and others--is betting that hybrid cable networks will be the consumers' top choice to deliver advanced digital services through broadband systems.

In trying to make his "wired world" dream a reality, in the past year Allen has acquired Marcus Cable for $2.78 billion, Helicon Cable Communications for $550 million, and several other cable operators. Allen has also invested $750 million in Go2Net, hoping at some point to link the Internet director with his expanding cable empire.

Earlier this month, Microsoft invested $5 billion in AT&T giving the company an in to provide an additional 2.5 million to 5 million set-top boxes running Windows CE to power AT&T's cable systems with next-generation broadband services. The agreement came on the heels of AT&T's acquisition of cable operator MediaOne in a $54 billion cash deal to offer both broadband and local phone services.

Allen is an investor in CNET: The Computer Network, publisher of News.com.