Charter/Time Warner Cable merger nearing FCC approval *WSJ*: Merger conditions could boost online video and Internet competition.
by Jon Brodkin Ars Technica Mar 16, 2016 12:29pm CDT http://arstechnica.com/business/2016/03/chartertime-warner-cable-merger-nearing-fcc-approval/ Charter's footprint after the proposed merger. Charter <https://www.scribd.com/doc/266643484/Charter-BHN-and-TWC-Public-Presentation> Federal Communications Commission Chairman Tom Wheeler is likely to support Charter's proposed acquisition of Time Warner Cable (TWC) and may circulate a proposal to approve the merger with conditions "as soon as this week," *The Wall Street Journal* reported <http://www.wsj.com/articles/fcc-likely-to-circulate-draft-order-approving-charter-time-warner-deal-1458088390> last night, citing "people familiar with the matter." Wheeler would be circulating a draft order to fellow commissioners, a preliminary step to approving the deal. "The order would impose a number of conditions on the transaction, many of them aimed at boosting online video as a competitor to cable," the *Journal* reported. "One condition would bar Charter from including clauses in its pay-TV contracts that restrict a content company’s ability to offer its programming online or to new entrants, the people said. FCC officials worry those clauses, which are thought to be widespread in the pay-TV marketplace, could be impeding the growth of online video." The draft order could also require Charter to expand availability of high-speed Internet service to more homes. This might require Charter to compete against other ISPs instead of just offering service in areas where there are no other alternatives <http://arstechnica.com/business/2014/09/comcast-says-its-too-expensive-to-compete-against-other-cable-companies/>. "In some cases the buildout could give consumers an alternative to Internet service offered by big phone companies like Verizon and AT&T," the article said. "Mr. Wheeler has indicated before that it would help competition if cable companies venture outside their exclusive regions and 'overbuild' into each other’s service areas to compete against each other." Since the buildout requirements are still being negotiated, it's not yet definite that the FCC will require Charter to compete against other ISPs, the report said. *Politico* also reported that FCC officials are talking about what conditions to impose on Charter's merger. "The latest development shows the Charter deal is further along the path than Comcast's failed $45 billion bid for Time Warner Cable, which never reached the point where regulators seriously considered conditions," *Politico* wrote <http://www.politico.com/tipsheets/morning-tech/2016/03/morning-tech-apple-says-doj-is-trying-to-commandeer-the-company-no-major-sticking-points-for-thunes-fcc-reauth-bill-despite-delay-fcc-eyes-conditions-for-charter-merger-213246>, citing its own sources. When contacted by Ars today, an FCC spokesperson declined to comment on the merger because it's still under review. The FCC is nearing the end of its 180-day <https://www.fcc.gov/proceedings-actions/mergers-transactions/charter-time-warner-cable-bright-house-networks-mb-docket> timeline for reviewing mergers, though 180 days is an informal guideline rather than a hard-and-fast rule. The FCC can approve a merger before the clock expires, or it can extend its review beyond it. Charter announced <http://arstechnica.com/business/2015/05/charter-to-buy-time-warner-cable-become-second-biggest-broadband-provider/> its $56.7 billion deal to buy TWC in May of last year. Charter also struck a related deal to buy Bright House Networks, a smaller cable company, for $10.4 billion. If Charter's acquisitions of TWC and Bright House are approved, Charter would become the nation's second largest Internet service provider after Comcast, with the two companies controlling the majority <http://arstechnica.com/business/2016/01/comcast-and-charter-may-soon-control-70-of-25mbps-internet-subscriptions/> of high-speed Internet subscriptions. Comcast struck a deal to buy Time Warner Cable in February 2014, but it failed to convince <http://arstechnica.com/business/2015/04/comcast-admits-defeat-terminates-time-warner-cable-merger-agreement/> the FCC and Department of Justice to approve that merger. Among other things, the agencies were concerned that a bigger Comcast would try to harm <http://arstechnica.com/business/2015/04/a-mega-comcast-could-have-squashed-online-competition-government-says/> online video providers that need access to Comcast's broadband network. Charter has argued that it doesn't pose the same threat to online video as Comcast. In a bid to get the deal approved, Charter has promised <http://arstechnica.com/business/2015/06/charter-we-wont-impose-data-caps-after-buying-time-warner-cable/> not to impose data caps and said it will not charge <http://arstechnica.com/business/2015/07/netflix-supports-chartertwc-merger-after-promise-of-free-network-connection/> online content providers and network operators for direct connections to its network. Charter also promised to abide by net neutrality restrictions even if the FCC rules <http://arstechnica.com/business/2015/02/fcc-votes-for-net-neutrality-a-ban-on-paid-fast-lanes-and-title-ii/> passed last year are overturned in court. The FCC could make Charter's promises official by including them in a merger approval. *Disclosure: Bright House is owned by the Advance/Newhouse Partnership, which is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica. Advance/Newhouse would own 13 percent of Charter after the proposed transactions.*
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