Time Warner Cable Focus Of $56.7bn Takeover

Charter Communications has confirmed a $56.7bn (£37bn) deal to take over Time Warner Cable, creating one of the largest TV and internet providers in the US.

The buyout of the larger rival would create a competitor to America's market leader Comcast Corp.

But Federal Communications Commission was swift to serve notice that it would closely examine the deal, looking not only on absence of harm but benefits to the public.

The deal comes as cable and internet firms in America look to cut costs and gain pricing advantages through consolidation.

The massive expansion of online media services such as Netflix, has put the cable industry under growing pressure.

Charter is also to buy Bright House Networks, a smaller cable provider, for $10.4bn (£6.75bn).

The expanded Charter will have nearly 24 million customers, compared with Comcast's 27 million.

However, Time Warner Cable's shares only rose 8% in premarket trading - less than expected - indicating concerns the deal may face regulatory obstacles.

Comcast pulled out of a $45bn (£29bn) deal to buy Time Warner Cable last month under pressure from regulators, worried about the impact on competition.

FCC chairman Tom Wheeler said: "The Commission will look to see how American consumers would benefit if the deal were to be approved.

"In applying the public interest test, an absence of harm is not sufficient."

Charter said one the deal had gone through it would form a new public company, known as New Charter.

Time Warner Cable was spun off from the parent entertainment company Time Warner in 2009.