FCC Seeks To Protect Online Video In Charter-TWC Merger Conditions

Federal Communications Commission Chairman Tom Wheeler reportedly will support Charter’s $55 billion acquisition of Time Warner Cable, according to The Wall Street Journal.

But the FCC’s approval will
likely come with terms aimed at preventing Charter from thwarting online video.

Charter already has promised to follow some of the net neutrality rules for at least three years as a merger
condition, even if the regulations don’t hold up in court. The company also vowed to refrain from capping broadband data, or charging customers based on their data consumption, for at least three
years. Charter also promised that it won’t charge content companies like Netflix extra fees to interconnect directly with Charter’s servers.

Wheeler is expected to require Charter to agree to
those conditions — although it’s not yet clear how long a time commitment the FCC will seek. Some observers, including Sen. Al Franken (D-Minnesota), have suggested that three years isn’t enough
time.

Wheeler also reportedly wants to prohibit Charter from contractually restricting TV networks’ ability to distribute shows online.

Late last year, Dish Network said in an FCC filing that Charter is « threatened by » Sling TV, and has used
anticompetitive methods to undermine the service. Dish alleged that documents « reveal thinly veiled complaints to programmers about making their programming available to Sling TV and other OTT
products. »

HBO separately has expressed concern that a post-merger Charter may hinder online video services.

Charter has consistently argued that it doesn’t have any reason to hinder
online video distributors, because Web video drives demand for high-speed broadband.

In addition, the FCC is expected to require Charter to build out its network in order to offer broadband
service to more homes.

Regulators in New York, but not in California, have already approved the deal. The California Public Utilities Commission, which is slated to vote on the deal in May, reportedly wants Charter to expand plans for low-cost broadband. The company
has said it will try to extend high-speed, $14.99 a month service to 200,000 low-income families in the state.

The anti-merger group Stop Mega Cable Coalition said Wednesday that the deal
« profoundly threatens competition and choice in the cable-and-broadband marketplace. »

The group added that the FCC and Justice Department’s recent history indicates that competition is a
priority. « This all suggests that the deal will not be approved without strong, enforceable and long-lasting conditions that protect consumers, » the coalition said.

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