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Charter not rushing to do L.A. deal

Tue, 12/07/2004 - 7:00pm
George Mannes

Copyright 2004 TheStreet.com, Inc.

TheStreet.com

December 7, 2004 Tuesday 5:25 PM Eastern Time

Charter (CHTR:Nasdaq) intends to stay the course.

Speaking Tuesday at the Credit Suisse First Boston Media and Telecom Week conference at Manhattan's Plaza Hotel, CEO Carl Vogel and finance chief Derek Chang said Charter isn't itching to do a deal with its Los Angeles-area cable systems, though the execs said they aren't averse to a transaction if the right one presents itself.

Vogel also said he believes Charter backer Paul Allen remains firmly committed to the cable industry as a way of offering consumers high-speed Internet connections, and that Charter is monitoring efforts by the big local telephone companies to compete for cable customers.

Charter rose a penny Tuesday to $2.16.

Vogel spent much of his presentation trying to put the kibosh on speculation that Charter would be selling off its Los Angeles system to enable further debt reduction.

Responding to questions on that subject, Vogel cited the area's excellent demographics, particularly in Malibu and Pasadena. "We like those markets a lot," Vogel said. He added that Charter isn't interested in taking assets that it deems core properties and "trading them for the sake of trading them," Vogel explained.

"We have sufficient scale in the L.A. market ... to do just fine," Vogel said.

Vogel said talk about a Charter L.A. system swap is driven in part by speculation over the fate of bankrupt rival Adelphia, which is gearing up for a long-discussed auction of some or all of its assets. Like Charter, Adelphia has an attractive set of properties in the City of Angels.

That said, opportunities may yet present themselves in the Adelphia sales process, Vogel said, adding that any resolution there is "a long ways out."

Responding to questions about Microsoft (MSFT:Nasdaq) founder Paul Allen's commitment to cable, Vogel said, "You have to ask Paul Allen those questions."

Vogel added that Allen's fundamental belief is that cable is the right broadband delivery system, and that hasn't changed. "How he decides to spend his money is up to him," Vogel said.

Addressing Bell competition, Vogel isn't dismissing the efforts of potential rivals like Verizon (VZ:NYSE) and SBC (SBC:NYSE). "We aren't dismissing any local competition," the exec said. But "I haven't seen anything that's particularly different from a consumer proposition."

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