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If it is allowed to gobble up its number two rival, Time Warner Cable, Philadelphia-based Comcast will become the largest broadband provider in the United States, and perhaps the largest outside China. The two companies together will control about half of what is called triple-play services — video, voice and internet — in the U.S. The two companies together would have about 33 million broadband connections that brought in about $18 billion in broadband revenue during 2013.

Back in November 2013, my colleague Stacey Higginbotham laid out a persuasive argument about why the cable consolidation is all about broadband. She wrote:

So the cable industry, if it can consolidate, gets access to the most important pipe coming into people’s homes (after power and water) and the fewer cable companies there are, the more unified the rate structure might appear. So today Comcast has a cap, but Time Warner Cable doesn’t. However, if Time Warner Cable gets bought by Comcast or Charter, both of which have caps, that unlimited broadband from TWC goes by the wayside. But consolidation in cable is going to take a lot of creativity, as the regulatory environment is unclear.

And when you start to peel the onion and start looking at their average monthly revenues of the combined companies, you start to see why the game is all about broadband. According to UBS estimates, the combined company could see its consumer data-only revenues go from $17 billion at end of 2013 to about $23 billion by end of 2018. Voice revenues go from about $6 billion at the end of 2013 to $6.6 billion at end of 2018.

In comparison, video revenues would go from estimated $31 billion at end of 2013 to $34 billion at the end of 2018, according to UBS estimates. The cost of video programming for combined companies were estimated to be around $14 billion at the end of 2013 and will increase to $19 billion by 2018, according to UBS estimates.

At end of 2013, Comcast’s estimated average revenue per user (ARPU) of around $151.30 a month, while Time Warner Cable’s ARPU was around $148.70 a month, according to UBS. The video-only ARPU per month was roughly $78 a month (give or take a dollar). Of the $78 a month in monthly video ARPU, Comcast and Time Warner Cable spent roughly $35 a month on video programming per month per average subscriber, which means that they were making $43 a month per subscriber from their video business. Both companies have a gross margin on the video business of roughly around 55 percent.

Compare that with the internet/broadband business. Of the total, the two companies had data-only revenues of roughly around $43 a month. Add to that number the voice telephony revenues and you start to see that cable business is less about cable and more about broadband. Comcast made about $29 a month from its voice business and Time Warner Cable made about $40 a month from its voice telephony business. Voice also has very high gross margins — about 91 percent for Comcast and 82 percent for Time Warner Cable.

You can see broadband is not only a much faster growing business, it also has higher gross margins and comes with much fewer headaches — such as paying through the nose for programming. Broadband also comes with one more thing — a virtual monopoly.

Back in July 2013, I wrote a post about the increased M&A activity in cable land. I explained the reasons for the frenzy:

The future isn’t about linear, old-styled video. Instead, it is about broadband and broadband-enabled video. The cable companies — at least in the U.S. — have the fastest pipes into majority of homes. They are faster than phone companies and have a deeper footprint. The new technologies are ensuring that they can keep increasing the speed Netflix, Hulu and YouTube are programming our video watching behavior — any amount of video, anytime, anywhere on any screen, as long as there is broadband. The more we watch internet video, more bandwidth we need. The fact, that cable companies (big and small) have already started to meter broadband and are putting limits on the networks; we are only on the cusp of seeing a big inflation in internet access costs. Why? Because cable companies are virtual monopolies.

The excerpt of this story was updated Thursday morning with the acquisition price.