Charter Queried on Web Video Rivalry by FCC in Time Warner Deal

  • FCC asks Charter, TWC about competition from Netflix, Amazon
  • Agency near the beginning of its review of $55 billion deal

Regulators reviewing Charter Communications Inc.’s proposed $55.1 billion acquisition of Time Warner Cable Inc. want to know more about how the cable company has reacted to competition from streaming video innovators such as Netflix Inc., Inc. and Hulu LLC.

The Federal Communications Commission in a request released Tuesday asked Charter for documents about its customer gains or losses to Web video and whether it’s slowed or blocked access to rival services.

The questions show the FCC is concerned about whether cable companies that provide access to the Internet may squelch streaming video that competes with their traditional channel lineup. Comcast Corp. in April abandoned its planned merger with Time Warner Cable after regulators said the combined company could thwart online video.

The FCC, in the documents released Tuesday, also asked for similar information from Time Warner Cable and asked for responses by Oct. 13.

The agency is near the beginning of its scrutiny of Charter’s proposed deal to create the nation’s second largest cable company behind Comcast.

Charter, in a June filing, said it doesn’t have any incentive to harm Web video since its growth depends on broadband, and it won’t own any rival national programming. In its data request, the FCC asked Charter to explain its claim that it would be willing to use its broadband business to promote online video, “given the potential impact on the company’s video business.”

Net Neutrality

Charter had said in June it would offer fast Internet that’s cheaper than comparable offerings from its merger partners. Charter also said that for three years it won’t block or degrade Web traffic, regardless of the outcome of litigation that seeks to overturn the FCC’s open-Internet rules.

Adding Time Warner Cable almost quadruples Charter’s cable subscribers, bringing it customers in cities including New York, Los Angeles and Dallas. The combined business would have about 17 million basic cable customers, second to Comcast’s 22 million.

Charter also is buying Bright House Networks LLC, which also received a query from the FCC. The purchases need clearance from the FCC and Justice Department.

“We are already preparing our responses and look forward to further
demonstrating the consumer benefits of these transactions,” said Justin Venech, a spokesman for Charter, a Charter spokeswoman.