New Charter Fights Back Against Deal Critics

Spells out reasons deal is boon, not threat
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Charter has told the FCC just how wrong those trying to block its proposed merger with Time Warner Cable and Bright House are about what the resulting company, New Charter, would look like.

In a joint filing with the FCC Tuesday (Nov. 3) responding to petitions to deny the merger, Charter and the other merging parties said the new company would not harm video competition and that proposed unbundling and wholesale access conditions—opponents usually include what the FCC should do to limit harms if it does approve the deal—would be harmful.

The companies said concerns about foreclosure of competing MVPDs or online video distributors (OVDs) and any harm to the set-top-box market are similarly misplaced. It said that debt leverage should not be a concern, that they are committed to diversity—Charter is currently negotiating a memorandum of understanding to that effect with the National Hispanic Media Coalition, for example—and that the transaction will benefit low-income households.

Charter et al. said the deal will expand and improve broadband, provide advanced video options and expand Charter's "industry-leading commitment to an open Internet." Charter has said it would abide by new Open Internet rules regardless of their legal fate, just as Comcast pledged in its NBCU deal.

They said the deal will result in hundreds of millions of dollars in "efficiencies" that would be passed along to consumers in the form of "more competitive" sub fees and more investment.

It said opponents of the deal did not make a case for why those would not be valuable benefits, or why a reduction in programming costs resulting from those efficiencies would be anticompetitive.

Charter also pointed to its settlement-free interconnection—it pointed out that Netflix and Cogent support the deal—lack of data caps, and no cable modem rental fees as broadband friendly policies that would be extended to the other companies as part of New Charter.

It also called the challenges to its public interest benefits "meritless."

The National Association of Broadcasters asked the FCC to hold off on approving the deal until and unless it reforms broadcast ownership rules that will let them better compete with merging MVPDs.

Charter said the point was off-topic—technically "not transition-specific"—and as a policy would require the FCC to delay transactions indefinitely "whenever tangentially-related rulemakings or reports are pending." And besides, it said, the point is "unfounded," with the competitive field already titled toward broadcasters thanks to retrans rules that allow them to "dictate" carriage terms.

As to the argument that the combined company would create a duopoly market with Comcast that would allow them to colluded to hurt OVDs, the companies said New Charter has no incentive to do so and in any case is based on conjecture, not evidence and so "is not a sufficient basis for regulatory action."

“New Charter’s commitments to provide faster broadband service without caps or modem fees, establish industry leading interconnection policies, offer advanced video services and return thousands of overseas jobs to the U.S. [repatriating call centers], puts this transaction squarely in the public interest and clears a path for timely approval," Charter, TWC and Bright House, said in a statement on their filing.

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