The Adelphia effect

Time Warner Cable's takeover of Adelphia Communications is getting lots of ink locally, but it's being dismissed by investors because, well, Time Warner has all those AOL issues to deal with. But the acquisition could turn out to be the best thing TW has going for it. The cable unit gains more than 7.6 million homes, many of which have been stuck with Adelphia's deteriorating service. There's also the cost-cutting possibilities. But the biggest plus might be the chance to talk up the cable business. As explained by Fortune's Stephanie Meta:

When Time Warner and Comcast were trying to acquire the assets from Adelphia's prickly creditors as cheaply as possible, neither company wanted to inflate the valuations of cable companies, which have been severely depressed for the last few years... Now that the deal is done - Time Warner and Comcast paid $12.5 billion in cash plus Time Warner Cable stock representing about 16 percent of Time Warner Cable's common equity - both companies may feel free to extol the virtues of cable.