Charter-Time Warner Cable Deal Gets FCC Approval With Conditions

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FCC chairman Tom Wheeler

The Justice Department had given its go-ahead with several conditions on April 25, with chair Tom Wheeler back then recommending the FCC follow suit.

The Federal Communications Commission has approved the planned acquisition of both Time Warner Cable and Bright House Networks by Charter Communications following recent approval from the Department of Justice.

The FCC announced the move Friday and said that its reasoning, as well as specific conditions it will require, will be forthcoming in a few days. 

The Free Press Action Fund, a nonprofit group that had been lobbying against the merger, was quick to denounce the FCC's decision.

“Americans now face the grim reality of a marketplace where Charter and Comcast have unprecedented control over our cable and Internet connections," said Free Press CEO Craig Aaron. "Their crushing power will mean fewer choices, higher prices, no accountability and no competition."

The DOJ had given the go-ahead on April 25 with several conditions. On the same day, FCC chairman Tom Wheeler issued a recommendation that the five-member body also approve the deal with conditions of its own, including some that presumably favor Amazon.com, Hulu, Netflix and other online streaming companies.

At the time, Wheeler announced three conditions that will be in place for seven years. They state that Charter will not be permitted to launch usage-based broadband pricing or impose data caps and will not be allowed to charge interconnection fees, including for online video providers. The third condition "outlaws video programming terms that could harm" any service that distributes video over the internet and protects them from "retaliation."

Charter had in an FCC filing also emphasized its commitment to the principles of net neutrality.

Charter, in which John Malone's Liberty Media owns a big stake, swooped in with a deal for TW Cable last year after Comcast abandoned its bid for the company amid regulatory opposition. The cash-and-stock deal had a price tag of around $55 billion when it was announced. Including debt, the deal at the time was valued at $78.7 billion.

The TWC and Bright House deals will make Charter, run by CEO Tom Rutledge, the No. 2 U.S. cable operator behind Comcast and the No. 3 pay TV operator behind Comcast and AT&T/DirecTV. The bigger company will command about 15 percent of the nation's cable and satellite TV subscribers and 22 percent of its broadband subscribers.

The National Association of Broadcasters and Dish Network had urged the FCC to reject the proposed combination. But opposition to the Charter deal has been less prevalent, and many in the sector had predicted conditional approval.

The deal is expected to close within days of an expected May 12 ruling by the California Public Utilities Commission, the final regulator to decide on the combination.

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