Leave it to Liberty Media’s John Malone — Charter Communication’s largest shareholder — to provide a no-nonsense explanation of the logic behind the cable company’s $56.7 billion deal (not including debt) to buy Time Warner Cable.

Charter CEO Tom Rutledge plans to “wake up a sleepy cable company that was treading water and pleasing shareholders with [stock] buybacks,” Malone told Liberty shareholders today in their annual meeting.

Rutledge likely will take pages from his playbook at Charter by making TWC systems all digital, getting rid of the standard definition channels that duplicate high-definition ones, and using the freed-up bandwidth to offer speedy broadband.  He’ll move the TV guide and other services to central servers instead of set top boxes, so they can be updated and fixed without a service call.

“If we can take truck rolls and calls out of the business ….we don’t have to raise prices. We can drive simplicity.”

Charter will be big enough so it can compete with Netflix by introducing “a meaningful VOD offering, perhaps in cooperation with other operators…Whether you call it catch up TV or competing with Netflix, the ability to see a lot of programming on a random access basis is very attractive.” So far TV Everywhere “is TV Nowhere,” he says. “That allowed Netflix and Hulu to fill a vacuum that should have been filled by the [pay TV] distributors. That is still an opportunity.”

He also doesn’t rule out a wireless phone offering built on WiFi. In 2012, when leading cable operators sold wireless spectrum they owned to Verizon, the agreement gave them the right to offer hybrid services in partnership with the telco — effectively carrying calls on WiFi when it’s available, and on Verizon’s cell network when it isn’t.

Upgrading TWC would take about three years. “People will say, ‘Oh, he’s spending too much capital.’ But in the end it will be worth it.”

Malone also says the Charter-TWC deal will pass muster with the FCC and Justice Department — even though they opposed Comcast’s plan to buy TWC. “The government would be greatly pleased” if Charter creates a wireless service that would provide “a meaningful threat” to AT&T and Verizon. Charter also is much smaller than Comcast, and doesn’t own entertainment properties the way Comcast does with NBCUniversal.

If TWC bought Charter “would that have caused regulatory concern? Clearly not.”

Malone adds that government approval will “happen faster than people think….There’s very little dirty underwear that people can find at the bottom of the suitcase. It’s all out there.” With AT&T preparing to buy DirecTV, regulators won’t want “a Snow White and the 7 Dwarfs situation in the terrestrial industry.”

FCC Chairman Tom Wheeler’s decision to define broadband as a 25 MB transmission — something cable companies can offer more easily than telcos can — “was designed to say ‘no’ to Comcast. Plain and simple…It’s like saying a Ferrari dealership has a monopoly because the guy down the street can sell Bentleys but not Ferarris.”

Yet consolidating cable companies have to make a strong case that they’ll use their speedy Internet transmissions to offer new services. Despite its enormous size, “nobody’s yelling to break up Apple …Why? Because they continue to innovate and please everybody with their new creations.” The cable industry “needs to be thinking about outside the home, mobility and service” for businesses and consumers.

On other matters, Malone says that the pay TV basic bundle is likely to break up — which should worry programmers, especially ones like Disney whose ESPN has long term sports rights agreements. Consumers may not “support that kind of a cost structure in the out years….If you see what happened with Time Warner Cable and the Dodgers, they got stuffed.” Indeed, that “probably helped [Charter] with the purchase price.”

What didn’t help was the recent emergence of competition from Luxembourg-based Altice Group, led by billionaire Patrick Drahi — who also just agreed to buy Suddenlink.

“Patrick is a genius,” Malone says. He’s taking advantage of today’s low interest rates, and his company’s high equity value, to snap up global assets. “He’s going to be one hell of a large telecom entity.” Even so,”the jury is still out” over the calculations over how much savings he can wring out of Suddenlink. “Can he cut 2,000 people out of a 5,000 person work force? I doubt it.”

With so much cheap money available, though, “why not go to Las Vegas?”