DOJ Approves Charter-TWC Merger With Conditions

...

The U.S. Department of Justice on Monday greenlit Charter's $78 billion acquisition of Time Warner Cable, and a related $10.4 billion acquisition of Bright House Networks.

As part of the settlement, Charter agreed to not deny content providers the option to also sell shows to online video distributors (OVDs). So if one of their providers wanted to license content to a service like Netflix or Hulu, Charter could not stand in the way.

"Online video distributors offer consumers greater choices for video services," Principal Deputy Assistant Attorney General Renata Hesse, head of the DOJ Antitrust Division, said in a statement.

The Federal Communications Commission must also approve the deal. FCC Chairman Tom Wheeler on Monday circulated an order to his fellow commissioners, with three conditions focused on "removing unfair barriers to video competition." Like the DOJ deal, Charter cannot stand in the way of video licensing deals, but it's also banned from imposing usage-based prices or imposing data caps. Charter also cannot charge interconnection fees, which providers like Netflix often (reluctantly) pay for direct access to an ISP's network to speed up video streams.

"All three seven-year conditions will help consumers by benefitting OVD competition," Wheeler said in a statement. "The cumulative impact on these conditions will be to provide additional protection for new forms of video programming services offered over the Internet.

"Importantly, we will require an independent monitor to help ensure compliance with these and other proposed conditions," he continued. "These strong measures will protect consumers, expand high-speed broadband availability, and increase competition."

In a statement, Republican Commissioner Michael O'Rielly expressed concern that Wheeler's conditions are "well outside the four corners of the merger application to pursue unrelated matters and policies," but he pledged to "carefully consider the item put before me and vote in a timely manner." 

Charter Communications offered to buy Time Warner Cable and Bright House Communications in May, merging the second-, fourth-, and tenth-largest cable providers in the US. That came after the proposed merger of Time Warner Cable and Comcast fizzled amidst backlash from regulators. The move will create the second-largest cable company and third-largest multi-channel video programming distributor (MVPD). 

"We are pleased to reach this critical step in the regulatory review of our merger with Charter, and remain optimistic that the transaction will be finalized soon," Time Warner CEO Rob Marcus said in a statement.

Moving forward, the DOJ and FCC will monitor Charter to make sure it's compliant.

Charter Communications did not immediately respond to PCMag's request for comment.

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