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Comcast to bring its X1 service to L.A., New York within year of merger

A Comcast sign is shown in San Francisco, California February 13, 2014. REUTERS/Robert Galbraith
A Comcast sign is shown in San Francisco, California February 13, 2014. REUTERS/Robert Galbraith

By Liana B. Baker

Los Angeles (Reuters) - Within a year after its $45 billion acquisition of Time Warner Cable Inc closes, Comcast Corp aims to make its advanced X1 cable service available in areas such as New York and Los Angeles and other markets where it will gain a commanding new presence.

"We'll be within the first markets in a year," Neil Smit, president and chief executive of Comcast's cable unit, told Reuters.

The new technology would "bring considerably higher Internet speeds to Time Warner Cable customers" in those cities, Smit said, and give them access to such X1 services as Internet applications, viewing recommendations and voice control.

Features offered by the cloud-connected X1 cable box system could help Comcast pick up subscribers in major cities where Time Warner Cable's growth has stalled in recent years. Gaining entry to the New York and Los Angeles markets was part of the strategic rationale behind Comcast's offer to buy TWC.

In Los Angeles, satellite operators have emerged as big providers of pay television services, while in New York, Verizon's video services has taken significant market share.

Time Warner Cable's new advanced cable boxes should be capable of running Comcast's X1 operating system, Smit said in a recent interview at a cable industry show in Los Angeles, making the transition easier.

Comcast is waiting for regulatory approval of the Time Warner Cable deal. To that end, it announced last week it would divest 3.9 million subscribers to Charter, a complicated deal under which Comcast will trade some of its cable systems to Charter.

The TWC and Charter deals would leave Comcast a strong presence on both the East and West coasts and Texas.

Smit was unable to say how much the upgrades and rollout will cost.

He said the timing can still change, depending on the state of the acquired systems, which Comcast has not been able to assess in depth.

"Basically you want to enable enough data to pass through the network to deliver to the needs of the customer whether it's television channels or broadband," he said.

Time Warner Cable has already been upgrading its capabilities in several high-priority markets, such as Los Angeles and New York, which will accelerate the rollout, Smit said.

(Editing by Frank McGurty and Leslie Adler)

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