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Time Warner's Cable Call

An IPO will give investors a new way to play a hot sector.

A new cable stock is set to hit the market as

Time Warner Cable

prepares an IPO.

The Stamford, Conn., cable giant filed federal papers outlining a plan to sell shares of Time Warner Cable stock under the TWC ticker. The seller is the failed

Adelphia Communication

shop, which got the shares when Time Warner Cable bought part of the company's operations.

Though this isn't exactly the carve-out some

Time Warner

(TWX)

watchers were advocating, the deal will put about 17.3% of Time Warner Cable's outstanding Class A shares into the market. After the offering, Time Warner expects to control about 84% of the stock and 90% of voting power.

With rivals like

Cox

now private and

Cablevision

(CVC)

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planning the same move, investors have fewer choices when it comes to cable stocks. Meanwhile, shares in Cablevision and the No. 1 cable company,

Comcast

(CMCSA) - Get Comcast Corporation Class A Report

, have moved up sharply recently.

"It's a new way to play cable," says one money manager. "This is a good business and they are pushing their way into IP phone service and broadband."

Time Warner Cable has about 14 million subscribers within a market of about 26 million homes in New York, the Carolinas, Southern California, Texas and Ohio. As of June, the company says it has 4.6 million cable-modem customers and 1.4 million so-called digital phone subscribers.

Last year, Time Warner Cable generated $534 million in free cash flow on $13 billion in revenue.

Observers note that Time Warner Cable faces stiff challenges in the residential market as telcos like

Verizon

(VZ) - Get Verizon Communications Inc. Report

and

AT&T

(T) - Get AT&T Inc. Report

roll out fiber-optic networks to deliver TV, fast Net and phone services.

Time Warner shares rose 9 cents to $19.47 in midday trading Wednesday.