In a move that gives the word ‘clustering’ a new meaning on the Canadian cable front, Rogers Communications and Shaw Communications have inked a deal that will see the rival cablecos swap cable assets and make strategic alliances with their respective Internet properties.

Under the agreement, Rogers will swap existing cable operations in b.c., which represents roughly 623,000 subscribers, for Shaw’s cable operations in southern Ontario and New Brunswick, which together represent about 600,000 subscribers.

The cost of the incremental, 23,000, subscribers will be based on $3,300 per subscriber, or approximately $75.9 million.

Shaw has also agreed to sell its roughly 4.5 million shares in Cogeco Cable and Cogeco Inc. to Rogers at $44 per share. In exchange, Rogers will sell its four million shares in Cancom to Shaw for $23.50 per share.

Rogers has acquired an additional 1,234,700 subordinate voting shares of Cogeco Cable and 466,300 subordinate voting shares in Cogeco Inc. from a subsidiary of Shaw, bringing the cable giant’s interest to 12.7% in Cogeco Cable and 11.3% in Cogeco Inc.

In regards to Internet assets, the two companies will merge the operations of @Home Canada and Excite Canada into a single, national broadband and narrowband portal, available to more than 500,000 high-speed customers.

Because Excite is a 50/50 partnership between Excite@Home and Rogers Media, ownership of the combined entity, Excite@Canada, will be split among the three companies, with Rogers gaining 51%, Shaw 22.5% and Excite@Home 22.5%.

Cogeco and Moffat Communications will also be invited to partner on Excite@Canada.

Finally, Rogers has agreed to invest $125 million in Shaw’s new Internet backbone company, which will be created from Shaw’s recent us$100 million ($147 million) investment in 360networks and its $250 million acquisition of a national fiber network from 360. In exchange, Rogers will receive a 49% interest in the new company, to which both Rogers and Shaw will commit all their Internet backbone traffic. Rogers will also have the right to purchase us$25 million ($37 million) of Shaw’s us$100 million investment in 360, at cost.

At the end of the day, and in addition to Rogers proposed merger with Videotron, Rogers is looking at a 3.5-million customer base in Ontario and Quebec, as well as an additional 200,000 new customers in New Brunswick.

Shaw becomes ‘the most clustered and interconnected cable company in Western Canada while maintaining a critical mass of approximately 1.8 million subscribers,’ says Jim Shaw, president and ceo of Shaw.