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U.S. cableco hopeful of receiving final approval ‘soon’ as FCC, DoJ set out pro-competition remedies.
The Federal Communications Commission (FCC) and the Department of Justice (DoJ) on Monday outlined a series of remedies that will allow Charter Communications to push ahead with its plan to merge with Time Warner Cable (TWC) and Bright House Networks while at the same time protecting competition.
The two bodies worked together to impose conditions on the deal designed to ensure that the merger will not stifle competition in the video and content distribution market in particular.
The multi-billion-dollar combination of Charter, TWC and Bright House into New Charter – as agreed in May last year – will create the second largest cable operator and third largest multi-channel video programming distributor in the U.S., with more than 17 million video subscribers, the DoJ noted.
TWC has to date been the most aggressive multi-channel video programming distributor in the U.S. when it comes to agreeing restrictive deals that prevent programmers from distributing their content through online channels or tightly control online distribution, the DoJ said. Hence, New Charter will be barred from brokering any deal that limits the programmer’s provision of content elsewhere.
A statement from the FCC confirmed that the DoJ’s restrictions will remain in place for seven years.
The regulator itself added two conditions designed to remove "unfair barriers" to video competition. New Charter will not be permitted to charge usage-based prices or impose data caps, and secondly, it will be prohibited from charging interconnection fees, including to online video providers.
"All three seven-year conditions will help consumers by benefiting online video distribution competition," FCC chairman Tom Wheeler said, in a statement. "The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet."
The FCC also said its conditions are designed to increase broadband deployment in the U.S., giving access to high-speed services to an additional 2 million customer locations.
Wheeler has circulated an order to his fellow commissioners recommending that they approve the Charter/TWC/Bright House merger, subject to the concessions.
There was a quick response from Commissioner Michael O’Rielly. "At first blush, it appears that the Commission may have operated well outside the four corners of the merger application to pursue unrelated matters and policies," he said. "I will carefully consider the item put before me and vote in a timely manner."
Meanwhile, Charter welcomed the development.
"We are pleased that Chairman Wheeler has submitted the proposed conditions for consideration by the full Commission and that the DoJ has submitted its agreement for approval by the court," it said, in a statement.
"The conditions that will be imposed ensure Charter’s current consumer-friendly and pro-broadband businesses practices will be maintained by New Charter," the firm said. "We are confident New Charter will be a leading competitor in the broadband and video markets and are optimistic that we will soon receive final approval from federal regulators as well as the California PUC [Public Utilities Commission]."
