Advanced Television

FCC approves Charter/TWC merger

May 9, 2016

By Colin Mann

With the briefest of announcements, the Federal Communications Commission (FCC) confirmed May 6th that it had approved — with conditions — the Application filed by Charter Communications, Time Warner Cable, and Advance/Newhouse Partnership to transfer control of certain licences and authorisations from Time Warner Cable and Bright House Networks to Charter Communications.

It said that an Order detailing the Commission’s reasoning and the conditions would be issued in the coming days.

The decision paves the way for completion of the $78.7 billion (€69bn) deal, first announced at the end of May 2015. At the end of April 2016, FCC Chairman Tom Wheeler circulated an Order for an FCC vote to support the deal. Wheeler imposed conditions that he said would “directly benefit consumers by bringing and protecting competition to the video marketplace and increasing broadband deployment”. Charter is now in a position to close the transaction following the anticipated approval by the California Public Utilities Commission May 12th.

The combination of Charter, Time Warner Cable and Bright House will create a broadband services and technology company serving 23.9 million customers in 41 states, ranking it as the second largest IUS cabler MSO behind Comcast, which dropped its own attempt to merge with Time Warner in 2014 citing regulatory concerns.

“I want to thank Chairman Wheeler and Commissioners Clyburn, Rosenworcel, Pai and O’Rielly for their thorough review of these transactions,” said Tom Rutledge, President and CEO of Charter Communications. “The significant benefits of these transactions are clear; greater competition, more consumer and OTT friendly broadband policies, broader access to affordable broadband, and added US jobs.  The conditions are largely extensions of the longstanding consumer friendly values and practices of our company, and based on the commitments we put forward during the review process. Charter will be a stronger competitor in the broadband and video markets, well positioned to deliver these benefits and more to consumers.”

Charter agreed to a number of conditions as part of the FCC approval.  Many of the conditions either codified or reflected specific commitments Charter offered proactively at the beginning of the transaction review process, including no data caps or usage-based billing, a commitment to build out high-speed broadband service to unserved and underserved customers, the fastest low-income broadband programme of any major service provider, and settlement-free peering.

The Stop Mega Cable Coalition – a vociferous opponent of the deal – commended the FCC and DOJ for the time and attention both entities had dedicated to reviewing the transaction over the past year, but suggested that now that the review phase had concluded, much work remains. “The conditions attached to this merger need to be strictly enforced to ensure that Charter is held accountable for living up to its commitments,” it stated. “With the completion of this merger, the US now has a national cable duopoly controlling, among other things, over two-thirds of all high-speed broadband households. These two companies, ‘New Charter’ and Comcast, must not be allowed to abuse their power to thwart the growing and much needed competition posed by emerging over-the-top (OTT) streaming services. That has been the message of numerous industry stakeholders, members of Congress and hundreds of thousands of ordinary Americans, and we count on the enforcement agencies not to let us down.,” it concluded.



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