Cable operators have traditionally not been proponents of overbuilding, which is of course where a company goes into an area where another op already exists. But as part of the FCC approval process of the Charter/Time Warner Cable/Bright House deal, Charter has agreed to do just that — deploy high-speed Internet services to some areas that are already served by another company. The Commission released its official memorandum and order approving the deal this week.
American Cable Association President and CEO Matthew M. Polka says it is concerned because the condition it is not tailored to areas where he says additional entry is most needed — namely, where prices exceed those offered in urban areas and network performance failed to meet the FCC’s benchmarks.
“The requirement on Charter to overbuild competitors will harm consumers in two ways,” Polka says. “First, it will harm Charter’s customers by preventing Charter from investing its resources most efficiently, such as by upgrading its networks to higher speeds. Second, it will harm customers of local, small providers when these customers are satisfied with their existing service.”
Polka charges that harm to smaller providers could happen because New Charter will have an economic incentive to choose locations served by smaller providers “because Charter can most easily drive them out of the market, leaving Charter as the only provider.”
“The condition lacks limitations on the locations that count toward meeting the obligation, such as those that are most in need of competition or served by other large ISPs,” he adds.
Polka says interested parties were not given a reasonable opportunity to weigh in on the impact of this condition before its adoption. “Parties were given less than seven business days’ notice of this condition before the order was approved, and it’s been reported that some Commissioners voted on the merger in even fewer days,” he observes. “ACA urges the FCC to reconsider its action on its own and amend the condition so that at a minimum, it would be satisfied by builds to locations in areas served by only larger providers.”
Filed Under: Industry regulations