Dish and Broadband Lobby Want Limits on Charter's Cable Merger

  • Charter-Time Warner Cable combination said to need limits
  • Coalition says regulators should place limits on Charter

Dish Network Corp. and a trade group representing some of the largest U.S. broadband companies asked regulators to put limits on Charter Communications Inc.’s proposed purchase of Time Warner Cable Inc., saying the merger would hurt competition.

The proposed $55.1 billion deal would “reduce the ability of new players” to flourish in the broadband market, said Kevin Rupy, vice president of law and policy at USTelecom, an association with members including AT&T Inc. and Verizon Communications Inc.

U.S. regulators should make requirements of Charter before clearing the merger in order to keep the company from making Internet video more expensive for consumers or limit what’s available online, according to members of a new coalition critical of the merger who held a conference call Thursday.

The combination of Charter and Time Warner Cable would create the second-largest U.S. cable provider with 23.9 million customers in 41 states.

The enlarged Charter would have enough leverage to harm Dish’s Sling TV offering of programming over the Internet, said Jeff Blum, senior vice president at the satellite television company that’s branching into new services.

“There’s a lot of ways the new Charter can damage the over-the-top market,” Blum said.

Reviewing the Deal

Charter agreed in May to acquire Time Warner Cable and also to purchase Bright House Networks LLC for $10.4 billion. New York state regulators have approved the merger, and California regulators are considering it. In Washington, the Federal Communications Commission and Justice Department are reviewing the deal.

Critics of the deal formed what they call they the“Stop Mega Cable Coalition,” which staged Thursday’s call.

“Their arguments against the pending transactions are baseless,” Tamara Smith, a Charter spokeswoman, said in a statement. Charter’s practices are friendly to online video because, for example, it places no limits on data consumption, Smith said. She also cited support from Netflix Inc., the largest online video provider, which told regulators Charter had pledged fast connections.

Charter has told regulators it wouldn’t block or degrade Web traffic or favor its own online content ahead of others’ content, maintaining a commitment to the concept known as net neutrality. The company also wouldn’t impose caps on customers’ Internet usage or charge higher monthly rates if they consume more bandwidth.

Dominant Firms

Those commitments were made for three years, and that isn’t long enough, said Gene Kimmelman, president of Washington-based Public Knowledge, a policy group that promotes an open Internet, and a former antitrust regulator with the U.S. Department of Justice.

Charter and Comcast Corp., the largest U.S. cable operator, would be “two dominant firms” and they could coordinate to harm online video competitors, Kimmelman said.

Dish asked the FCC in October to require that Charter sell broadband capacity to wholesalers that could offer separate retail Internet service to consumers, forbid Charter from pressuring online providers to withhold their programs from Charter’s competitors, and offer standalone broadband service for no more than $29.95 per month. It said those stipulations should last for seven years, with a possibility of renewal.

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