Regulators Recommend Approval of Charter-Time Warner Cable Deal
April 25 2016 - 04:10PM
Dow Jones News
Federal regulators moved to approve Charter Communications
Inc.'s $55 billion acquisition of Time Warner Cable Inc. but said
the combined cable giant would have to live under several stringent
conditions that single it out among industry rivals.
In separate statements, the Justice Department and Federal
Communications Commission Chairman Tom Wheeler said the conditions
would mitigate threats to online video competition posed by the
merger, which will create the second-largest cable company, serving
more than 17 million video customers.
Mr. Wheeler is expected to circulate a draft order to the four
other FCC commissioners, and the matter is expected to be voted on
in coming days.
As part of the package of conditions, Charter has agreed to
build out broadband service to 2 million more homes. One million of
those homes will be in markets where Charter will compete with
another Internet provider offering the FCC's definition of
"broadband" at 25 megabits per second.
That would require some amount of "overbuilding" cable
companies, a person familiar the deal said. Historically, cable
companies haven't competed against each other in the same
geographic areas.
The deal would also require the combined company to swear off
data caps and usage-based billing for as long as seven years—a
restriction no other broadband provider faces today.
The company also wouldn't be able to charge companies such as
Netflix Inc. for so-called "interconnection" deals that govern
traffic handoffs between networks for that period. When regulators
approved AT&T Inc.'s deal to buy DirecTV last year, they didn't
impose a similar ban on "interconnection" fees.
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
and John McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
April 25, 2016 15:55 ET (19:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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