FCC To Approve Charter Merger, Conditions Ban Caps For 7 Years
This has become a bit of a broken record over the last six months, but the FCC appears very close to approving Charter Communications’ $79 billion (debt included) acquisition of Time Warner Cable and Bright House Networks. Sources tell Bloomberg that FCC boss Tom Wheeler is circulating an order to approve the deal with conditions, with a vote scheduled within weeks.
Charter had previously promised to avoid usage caps and adhere to net neutrality rules (even if struck down by the courts) for a period of three years.Soon after the story broke, FCC Tom Wheeler issued a statement confirming the report, and that several conditions would in fact be extended to seven years.
According to Wheeler’s statement, the conditions being attached to the deal will be focused on “removing unfair barriers to video competition.” Though Charter, Bright House and Time Warner Cable didn’t directly compete, consumer advocates had worried that the merger would simply create another Comcast with a vested interest in inhibiting the natural evolution of Internet video services.
“First, New Charter will not be permitted to charge usage-based prices or impose data caps,” states Wheeler. It should be noted that while Charter has flirted with the idea of usage caps over the years, the ISP currently doesn’t impose such restrictions.
“Second, New Charter will be prohibited from charging interconnection fees, including to online video providers, which deliver large volumes of internet traffic to broadband customers,” added the regulator.
“Additionally, the Department of Justice’s settlement with Charter both outlaws video programming terms that could harm OVDs and protects OVDs from retaliation– an outcome fully supported by the order I have circulated today,” Wheeler said.
“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 boss said of the conditions.
The FCC failed to give a specific timeline on merger approval, only stating it’s continuing to finalize the deal review. Shortly after the FCC’s announcement, the Department of Justice formally announced they would also be approving the deal.
“This merger would have threatened competition by increasing the merged company’s leverage to demand that programmers limit their licensing to these online providers,” the DOJ said in a statement of its own. “Together with our counterparts at the FCC, we have secured comprehensive relief and we will work together to closely monitor compliance to ensure that New Charter will not have the power to choke off this important source of disruptive competition and deny consumers the benefits of innovation and new services.”
The problem of course is that the broadband market by and large remains uncompetitive, meaning that Charter will likely just find some other, more creative way to pass on the $27 billion in debt the deal creates — to you, the consumer.