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Charter Communications has agreed to buy media giant Time Warner Cable in a deal which values the company at $78.7bn (£52bn).

The proposed deal would combine the second and third largest cable operators in the US.

Charter is also buying Bright House Networks, another cable operator, for $10.4bn.

The combined three firms will serve cable television and broadband to 23.9 million customers in 41 states.

Charter will pay about $55bn in cash and stock for Time Warner Cable, with the balance of the $78.7bn valuation coming from TWC's debts.

US cable companies are facing stiff competition from online service providers such as Amazon and Netflix, as customers increasingly choose to stream films and television shows over the internet at a time of their convenience.

Cable companies are responding by trying to cut costs and improve the quality of their shows.

The new merged cable giant will compete with US cable market leader Comcast, which currently has about 27 million customers.

Charter's takeover move comes a month after Comcast abandoned its plan to buy Time Warner Cable fearing pressure from regulators.

'Public interest'

The latest deal is also likely to come under regulatory scrutiny, and the Federal Communications Commission (FCC) quickly issued a statement.

"The FCC reviews every merger on its merits and determines whether it would be in the public interest," FCC chairman Tom Wheeler said.

"In applying the public interest test, an absence of harm is not sufficient. The commission will look to see how American consumers would benefit if the deal were to be approved."

The merged company would still be smaller than Comcast, which serves about a third of US broadband customers, said analyst Craig Moffett of Moffett Nathanson Research. "One has to be sober about genuine risks that this deal could still be rejected," he added.

Liberty Broadband, which currently owns about a quarter of Charter, is expected to own about 20% of the new company.

The deal values Time Warner Cable at $195.71 per share.