Unfortunately, cost savings probably aren't enough to justify a bid above Comcast's. Indeed, Comcast's bid implies an enterprise value, including debt, of 8.3 times consensus 2014 earnings before interest, taxes, depreciation, and amortization. That's a roughly $16 billion premium to TWC's $28 billion market capitalization last June before deal talks sufaced.
By contrast, Comcast says it expects $1.5 billion in operational cost savings from a merger with TWC. Assuming a tax rate of 35 percent, and put on a multiple of 10 times, those tax savings are worth about $10 billion. Comcast shares fell 4 percent Thursday in midday trade.
What can Charter do? The good news is that Charter is already on track to earn bigger profits by selling customers more digital services. But there aren't many large acquisition targets other than TWC. That also raises questions about John Malone's Liberty Media, which has acquired a 27 percent stake in Charter with the apparent intent of using the company to consolidate the U.S. cable industry.
(Read more: Netflix investors may find HBO results unwatchable)
A larger Comcast is also troubling for television programmers, which are constantly in tough negotiations with cable and satellite companies over carriage fees. More customers probably gives Comcast leverage when those talks stall.
That's especially worrying for small programmers who only command a small number of viewers. But large programmers can also run into trouble.
Consider Viacom, which often sells its programming in a bundle of over 20 channels to cable companies. In 2012, Viacom got into a public spat with DirecTV because the satellite provider didn't want to carry some of the lesser-watched networks. When the companies couldn't reach a deal, Viacom channels became unavailable to DirecTV's roughly 20 million customers for several days.
Comcast may also have grounds to argue that it pays too much for some larger channels that aren't performing well. Nickelodeon averaged 2 million viewers in 2013, down 14 percent from 2.3 million in 2012, according to Nielsen. Yet Nickelodeon's carriage fees from all of its cable and satellite distributors rose 11 percent to $729 million last year from $657 million the year before, according to SNL Financial.
(Read more: Missed the Twitter surge? Meet its Chinese cousin)