As promised a few days ago, the FCC released the full memorandum and order approving the Charter, Time Warner Cable/Bright House merger. Running more than 400 pages, it offers some clarification on the conditions imposed, including those the Commission says will help diminish potential threats to online video competition.
“First, for seven years, we prohibit New Charter from imposing data caps or charging usage-based pricing for its residential broadband service. This condition ensures that New Charter will continue Charter’s past pricing practices and protects subscribers from paying fees designed to make online video consumption more expensive leading subscribers to stick with a traditional pay TV bundle,” the FCC states.
“Second, to prevent New Charter from raising prices on companies that deliver Internet traffic — including online video traffic — requested by its broadband subscribers, we condition the transaction on a modified version of the Applicants’ settlement-free interconnection commitment,” the order continues. “The Applicants committed to interconnect with qualifying companies for free.”
Additionally, New Charter will be prohibited for seven years from entering or enforcing contractual terms that prevent or penalize programmers from distributing content online. The operator also will be required to deploy high-speed broadband to 2 million more homes and offer a low-income broadband program for eligible households.
In a statement released by Charter last Friday when the FCC first announced the approval, the operator states: “Many of the conditions either codified or reflected specific commitments Charter offered proactively at the beginning of the transaction review process, including no data caps or usage-based billing, a commitment to build out high-speed broadband service to unserved and underserved customers, the fastest low-income broadband program of any major service provider, and settlement-free peering.”
Commissioner Ajit Pai wrote a scathing dissent of the FCC’s order.
“It is quite clear the Commission’s majority does not believe that the merger of Charter, Time Warner Cable, and Bright House is in the public interest,” he says. “This order spends over 100 pages detailing the harms that would allegedly result from the transaction. And when the discussion turns to the merger’s purported benefits, the words ‘modest’ and ‘minimal’ are used over and over again.”
Pai charges that the Commission is actually approving the deal “because it has turned the transaction into a vehicle for advancing its ambitious agenda to micromanage the Internet economy.” He also says that the order sets the stage for the Commission to target paid peering and usage-based pricing on an industry-wide basis.
“Given how badly broken the current merger review process has become at the FCC — how rife it is with fact-free, dilatory, politically motivated, non-transparent decision-making — I believe Congress should implement major reforms of the procedural and/or substantive rules governing the Commission’s assessment of transactions,” Pai writes.
Filed Under: Industry regulations