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Herring 'Modifies' Charter Deal Support at FCC - Broadcasting & Cable

Herring 'Modifies' Charter Deal Support at FCC

Cites OTT issues, a sweet spot for concerned government deal vetters
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Herring Networks (Wealth TV, America One Network), which in September told the FCC it supported the Charter/Time Warner Cable/Bright House Networks merger, is having second thoughts, tying those to the hot-button issue of over-the-top distribution.

In a Sept. 16 filing, the company said Charter has over several years "demonstrated a pattern and practice of extending fair carriage consideration to independent programming services." It went further, saying it was in regular conversation with almost all other independent networks and has "not heard of any formal  or information complaints" against Charter.

"That record should speak volumes about the character and approach of the company when it comes to relations with independents, who typically lack the heft, scale, and negotiating leverage of larger programming entities," said Charles Herring, president of Herring Networks in that September filing.

But in meetings with Gigi Sohn, chief counselor to FCC Chairman Tom wheeler and other FCC officials last week, according to a just-filed FCC document, Herring said he had a host of issues with  how Charter was treating its two independent networks (Wealth TV and One America News Network [AONN]) and that "based on its recent dealings with Charter, it is reasonable and credible for Herring Networks to modify its assessment of the Charter - TWC merger."

That modification included the rather different assessment of Charter's "fundamental lack of respect for independent programmers."

Herring said that he had tried to negotiate an anticompetitive clause out of its existing programming contract with Charter, that is says "contractually prevents Herring Networks, Inc. from exhibiting its linear feed of AWE (WealthTV) to over the top (“OTT”) devices and streaming services."

The FCC has made clear in other deal reviews that access to over-the-top programming is a key competition issue.

WealthTV is available on Roku and Amazon (http://www.awetv.com/wheretowatch/), so Charter has apparently not been enforcing that provision too stringently (a Charter spokesperson had no comment), but Herring told Sohn and others that the provision caused the network to "slow deployment to OTT devices and avoid excessive advertisement of its services on OTT platforms."

"We want our customers to stream online video content," Charter said in a statement. "There is no more friendly broadband provider to OVDs than Charter. Charter’s slowest speed is 60 Mbps, we have no data caps, no contracts and modem fees.”

Herring conceded the provision had been modified, but said that only came after it pointed out the anticompetitive concerns and while Charter is trying to get government approval of the merger. Sources familiar with the provision confirmed that once current Charter management was made aware of the provision, it was eliminated.  

Charter does not carry AONN, which Herring also pointed out to the FCC, saying that was another example of Charter's independent network unfriendliness. But the network is also not carried by Comcast, Time Warner Cable, Cox or most other major MVPDS--with the exception of Verizon and U-verse, according to the channel's web site. 

Herring did not ask the FCC to reject the deal, but he does want conditions on the merger "to protect against discriminatory behavior by Charter Communications against independent networks and favoritism towards programming with common ownership such as Starz, Lions Gate, and Discovery Communications, Inc.’s plethora networks. Charter investor John Malone also has stakes on those programmers.

"Charter is committed to ensuring its customers have access to independent and diverse programming and we are gratified by the support we have received to date from independent programmers including TV One, BabyFirst, One World Sports, Crown Media, RFD-TV and The Blaze,” Charter said in a statement.

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