As part of the combination cash and trade deal, Charter, the cable television operator owned by billionaire Microsoft co-founder Paul Allen, will gain cable systems in South Carolina, Georgia, North Carolina, and Tennessee.
TCI will acquire the former Charter and Marcus assets, representing 140,000 subscribers, and, in a non-cash deal, TCI will get InterMedia's cable system in the Nashville, Tennessee market. TCI already is an investor in InterMedia.
The moves mark the latest in the trend for cable companies to trade systems in order to gain a larger market share in certain geographical areas, a process known as "clustering."
Many cable partners are swapping systems to better provide advanced data services, digital television, and voice telephony. Marketing and deploying those services to disparate regions is not cost-effective, companies claim.
InterMedia, which has nearly 1.2 million subscribers, will continue to operate with about 465,000 customers in Kentucky, Georgia, and North Carolina after the deal closes. Pending regulatory approval, the deal is expected to be final in the summer.
TCI is in the process of being acquired by AT&T in a $48 billion deal. AT&T has said it intends to use TCI's networks to provide voice telephony service. The Federal Communications Commission is expected to rule on the merger during the first quarter of 1999.