Charter Pitches Buildout Bonus of TWC DealNew Street Research takes it as sign FCC is focusing on conditions 2/17/2016 10:12:00 AM Eastern
Top Charter execs including COO John Bickham and CFO Christopher Winfrey met with FCC officials last week to make the case that the Charter-Time Warner Cable merger will mean faster residential broadband buildouts and upgrades.
New Street Research says it believes chances of outright rejection of the deal are low as the FCC staffers hone in on possible conditions, like broadband buildouts, citing last week's meeting as one example.
Getting broadband to every corner of the country is the prime directive of the FCC under chairman Tom Wheeler, so impact on deployment could be a selling point. Charter certainly hopes so.
During the Feb. 11 meeting, according to an ex parte document, the execs argued that deal synergies means improving "investment payback horizons," which means more residential lines and faster upgrades in the first four years following approval of the deal than if there were no merger.
Also representing Charter was Michael Katz, Sarin Chair Professor of Economics at the Berkeley Haas School of Business, who also argued that the deal would improve the buildout "metrics."
Among the FCC staffers at the meeting were Media Bureau chief Bill Lake and general counsel Jonathan Sallet.
"Both the FCC staff and the Charter team had a full complement of heavy hitters to discuss the economics of building out new residential line extensions and accelerating the upgrade of existing lines," said New Street of the meeting. "If the issue of residential line extensions was not central to the FCC’s current thinking, we doubt there would have been such a meeting focused on the topic."