Charter-Time Warner Cable Deal Would Reduce Competition, Opponents Tell FCC

Today was the deadline for opponents of Charter’s plans to buy Time Warner Cable and Bright House Networks to weigh in at the FCC. And regulators will have plenty of arguments to assess when they look at the $67 billion transactions: The Writers Guild of America, West, Dish Network, and consumer groups urged them to reject the deals that would leave Charter with 19.4 million broadband customers and 17.3 million video ones in 41 states.

Meanwhile CBS and other major networks, as well as the MPAA, blasted regulators — who must determine whether the mergers would serve the public — for seeking to share information about their private programming agreements with potential critics of the deals.

The Writers Guild says that the cable mergers would reduce competition, even though the companies don’t directly compete with each other. Most networks “seek national distribution” and the combination “reduces their options for reaching consumers.”

What’s more, a larger Charter along with Comcast “will control the overwhelming majority of the national high-speed broadband market” and “set the terms of access.” Although Charter promises to invest to build its Internet infrstructure, the debt it will have to assume to buy TWC means it “may have to divert significant resources to interest payments, forgoing investment and ultimately harming consumers.”

Dish Network, which opposed Comcast’s aborted effort to buy TWC, calls the Charter deal “no better for the public interest.” Charter and Comcast would become “a suffocating duopoly” in broadband that could threaten online video competitors including Dish’s Sling TV.

The top two cable providers post-merger will not need to collude in order to bring their collective weight to bear on an online video distributor (OVD),” Dish says. “Parallel foreclosures, with one of the two following the other, would be enough for an OVD to be shut off from most of the homes in the country.”

Activist group Public Knowledge raised similar concerns, adding that Charter’s potential clout key markets including Los Angeles, Dallas, Charlotte and Raleigh-Durham would give it extraordinary power over TV networks. “Because carriage on its systems would likely be important for most video programmers, it would have the ability to extract anticompetitive carriage terms,” the group says. Charter would be so big that “no programmer could afford to simply walk away from it.”

Independent and niche programmers would be especially vulnerable, and “may be tempted to sell to larger conglomerates in a tit-for-tat of consolidation.”

CBS and allies including Disney, Fox, Time Warner and Viacom didn’t take a position on the Charter deal — but charged that the FCC’s plan to share programming deal data “guts the fundamental protection the Commission long afforded sensitive information.”

The FCC has said that it needs to hear from outsiders who can see the deal terms to help determine whether a merger would end up hurting the public. It promises to keep the private information away from the public and business rivals.

The network group says the regulators don’t have the authority to change the process for reviewing the conracts “because it has not adopted, through notice-and-comment proceedings, procedures for permitting such disclosure.”

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