Cable Merger Future-proofs Against Internet

When you buy a TV, sales clerks often pitch you on "future proofing" your set. Turns out, buying a cable TV company relies largely on the same principle.

Charter's $38 billion bid to take over the much-larger Time Warner Cable is an attempt to future-proof its business by getting its foot in the door of millions more homes wired for Internet service. Gone are the days when one's primary reason for hooking up cable was for TV. Now, it's the Internet, which enables countless online services known collectively as the cloud. "Broadband is the gatekeeper to the cloud," says Tony Wible, an analyst with Janney Capital Markets. "There's insatiable demand for broadband." A combined Charter-Time Warner Cable would occupy a crucial position in more homes. With about 16 million customers, it would become the country's No. 3 provider of both pay TV services and high-speed Internet.