AT&T, Verizon Lobby Asks for Limits in Charter Cable Merger

  • Group asks U.S. to limit John Malone's role in new Charter
  • Consolidation likely to make coordination easier, group says

A trade group representing AT&T Inc., Verizon Communications Inc. and other companies asked U.S. regulators to limit Charter Communications Inc.’s coordination with other cable companies if it’s allowed to buy Time Warner Cable Inc.

USTelecom, in a filing Thursday with the Federal Communications Commission, also called for restrictions on Charter’s largest shareholder, John Malone. The FCC is vetting Charter’s proposed purchase of Time Warner Cable, which was proposed in May.

Consolidation is likely to make it easier for cable companies to work together against competitors, the group said in its filing.

Tamara Smith, a Charter spokeswoman, in an e-mailed statement said the deal has received support from “programmers, diversity organizations, business leaders and members of the communities we serve.”

Latest Critic

US Telecom, representing the nation’s largest telephone companies, is the latest to criticize the deal to create a new cable company, which would have 23.9 million customers, second only in the U.S. to Comcast Corp.’s 27.4 million subscribers. Earlier Dish Network Corp., the satellite TV provider which also offers online video, asked regulators to reject the deal, which it said would create “a suffocating duopoly.”

USTelecom said Malone, a billionaire with interests in Discovery Communications Inc. and the Starz movie provider, should be prevented from influencing Charter. Malone-affiliated companies must make programs available to competitors on the same terms they grant Charter, US Telecom said. Malone’s sprawling interests and potential role already have attracted questions from the FCC.

4 Million Customers

Charter CEO Tom Rutledge, speaking earlier Thursday on CNBC, said one way to think of the deal is Time Warner Cable picking up Charter’s roughly 4 million subscribers.

“It doesn’t actually change our position in the industry that significantly,” Rutledge said.

Charter told the FCC that combined with TWC it would serve customers in 41 states, including 19.4 million taking broadband, or less than 30 percent of of high-speed Internet customers.

Comcast last month said it has 22.9 million broadband customers.

Merger critics say the deal will harm competition in the market for high-speed Internet. Consolidation “is likely to detrimentally impact broadband competition” from telephone companies, according to the Thursday filing from Washington-based USTelecom.

Dish in a filing said Charter and Comcast together will serve almost 90 percent of U.S. broadband homes, and policy groups Public Knowledge and Consumers Union estimated the combined total at 46 percent.

“Two large national cable companies that behave in parallel ways may be little better than one large cable company,” the policy groups said last month in a joint filing opposing the deal.

Charter wants to acquire Time Warner Cable and Bright House Networks LLC, a smaller provider, for $55.1 billion and $10.4 billion, respectively. The deal needs approval from the FCC and Justice Department.

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