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Charter Communications, one of the country largest cable companies, has offered to swap its Los Angeles-area cable system with Time Warner Cable’s system in Wisconsin, according a recent trade magazine report. Under the proposed trade, Charter, which already offers cable services in the state, would quickly become Wisconsin’s largest cable provider.

Los Angeles

The report, from the Multichannel News, a long-running trade magazine covering the cable industry, cites “sources familiar” with Charter. The company, the story says, “had tried to engineer a swap with Time Warner Cable involving the Los Angeles (cable system) but could not reach an agreement.”

Charter, the country’s fourth-largest cable provider, is headquartered in the St. Louis area. It has about 551,000 customers in the L.A. area, according to the publication.

Meanwhile, Time Warner has about 560,000 customers in Wisconsin, primarily in Northeastern and Southeastern Wisconsin.

Although Time Warner reportedly wasn’t receptive to the offer, Charter may not have given up on striking a deal.

Charter is now interviewing bankers, Multichannel News reports, for a possible auction of its L.A. holdings. The magazine quoted an unnamed cable executive who said this was “an attempt to get Time Warner to step up and do something.”

The publication says Charter is “setting the wheels in motion for a sale of its Los Angeles system,” but it’s not clear yet if hopes for a Wisconsin swap could be resurrected.

Charter spokeswoman Anita Lamont declined to confirm whether the cable company had offered such a deal to Time Warner. “Consistent with what we’ve done in the past, we are not commenting on speculative transactions,” she told NewsBuzz.

A representative of Time Warner could not be reached for comment.

Charter is already a major provider of cable service in Wisconsin with 537,400 – or about 10 percent – of its 5.3 million customers located in this state. (Time Warner, by comparison, has about 14 million customers nationwide with just 4 percent in Wisconsin.)

Multichannel News says Time Warner is also reported to be considering buying cable systems in Indiana, Ohio and Kentucky from New York-based Insight Cable, a smaller company with fewer than 1 million customers. This could explain its reluctance to take on the L.A. area. “Tacking on a Charter acquisition may prove too much to swallow,” says the magazine.

Other explanations offered for Time Warner’s reluctance include “integration headaches” that resulted from acquisitions in L.A. and Dallas in 2006 and an “aggressive shareholder return strategy” which might be undercut by the costs involved in yet another acquisition. The magazine says, “There may not be room for a big cable deal.”

Time Warner’s disinterest could create an opportunity for Comcast, the largest cable provider in the U.S., or Cox Communications, the third largest, to step in and grab a piece of the L.A. pie.

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