FCC order offers merger details on Charter-Time Warner Cable deal

The Federal Communications Commission on Tuesday released its more than 330-page order approving the huge merger of Charter, Time Warner Cable and Bright House Networks.

In total with commissioner statements, the document runs 348 pages. The three Democratic commissioners approved the deal — with Democratic Commissioner Mignon Clyburn approving in part and concurring in part. 

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Republican Commissioner Ajit Pai fully dissented, while GOP Commissioner Michael O’Rielly approved in part and dissented in part. They both had problems with the conditions imposed on the deal, which they called overly burdensome. 

The full order offers the clearest details yet on the conditions imposed on the deal, which is expected to create the second largest Internet service provider and the third largest cable TV provider. The Justice Department also imposed conditions on the TV side of the deal. 

The massive deal, the FCC concluded, will give it incentive to harm the online video market so that it can continue to sell bundled TV and Internet service.   

As a condition to offset those harms, the FCC will prevent the company for seven years from imposing data caps on consumers or charging interconnection fees to online companies like Netflix. The FCC strengthened the interconnection terms after realizing Charter’s initial commitment would likely only benefit Netflix. 

After four years, Charter could begin petitioning to reduce those terms to five years. 

As a self-imposed condition, Charter will have to build out high-speed Internet to at least 2 million new customers within five years.

The company had also volunteered to follow many net neutrality rules for three years, regardless of whether they are struck down in the court. But the FCC said it gave no weight to that commitment, since the net neutrality rules are already the law of the land. That means Charter is under no legal obligation to follow that commitment if the court strikes down the rules. 

An appeals court decision on the rules is expected any day. 

Clyburn, the Democratic commissioner, was upset that the order did not include a condition to require the company to offer stand-alone broadband that is not bundled with TV service. Charter currently offers that option and told the commissioner it had no intention to “eliminate its competitive stand-alone broadband offering.”

— updated 6:15 p.m.