The American Cable Association is asking the FCC to repeal the Charter broadband overbuild condition as part of the merger with Time Warner Cable/Bright House. The ACA claims the to greater market concentration will harm consumers, online video distributors, content providers and smaller providers (the latter of which the associationrepresents). More on the conditions imposed on “New Charter” is available here.
“The overbuild condition imposed by the FCC on Charter is stunningly bad and inexplicable government policy,” ACA President and CEO Matthew M. Polka says. “On the one hand, the FCC found that Charter will be too big and therefore it imposed a series of conditions to ensure it does not exercise any additional market power. At the same time, the FCC, out of the blue, is forcing Charter to get even bigger.”
ACA thinks Charter’s overbuild targets will curtail services or force smaller ops out of business.
“The FCC’s overbuild condition will also cause Charter’s current subscribers to suffer as investment is diverted from upgrading existing services to uneconomic new market entry,” Polka adds. “The FCC needs to admit it overstepped and promptly reverse course before real harm is done,”
In a petition filed Thursday, ACA says the FCC failed to identify a merger-specific harm or benefit to justify the overbuild condition. ACA reports it estimates overbuilding could decrease the lifetime value of an ACA member’s triple-play customer by as much as 85 percent.
“Overbuilding will cut returns and force many operators to forgo investments that would otherwise have spent improving consumers’ experiences. And once Charter fulfills the overbuild condition and harms the competition, it will have little incentive to upgrade those areas later given its entry was uneconomic,” ACA says in a statement.
Filed Under: Industry regulations