FCC gets Bern notice on Charter-TWC deal
Senators call for grilling of cable companies over merger
A group of US Senators is asking broadband watchdog the FCC to mull over their concerns about the proposed $78bn merger between Charter Communications and Time Warner Cable.
In a letter [PDF] to FCC chairman Tom Wheeler, Senators Bernie Sanders (I-VT), Al Franken (D-MN), Elizabeth Warren (D-MA), Ed Markey (D-MA), and Ron Wyden (D-OR) ask the commission to consider whether the deal would harm competition, and to impose conditions to protect consumers from abuse at the hands of the newly-formed cable giant.
"The proposed 'New Charter' would effectively create a nationwide broadband duopoly, leaving New Charter and Comcast largely in control of the essential wires that control how we commonly communicate and conduct commerce in the 21st century," the letter reads.
"The two companies would control nearly two-thirds of the nation's high-speed broadband homes."
Additionally, the Senators worry that the $55bn cash component of the merger will place Charter in heavy debt that will be paid off by raising prices on customers who, thanks to the merger, would no longer have the option of switching to a competing service.
The letter stops short of proposing an outright block on the merger, but asks Wheeler and the commission to "thoroughly address" any potential that the acquisition could result in higher prices and worsening service for customers.
"The DoJ has explained that cable companies are essential gatekeepers to what customers watch and how they watch it," the letter reads.
"In effect, New Charter will be able to serve as the gatekeeper to millions of consumers – a very powerful tool, particularly for the nearly two-thirds of customers within New Charter's territory who would lack access to at least one alternative high-speed broadband provider."
Charter has already cleared some important hurdles by winning over New York state and gaining the endorsement of streaming giant Netflix, but the mega-deal will not be able to proceed without the approval of both the FCC and the US Department of Justice.
The merger application with FCC is currently in the midst of a 180-day review period that is set to wrap up in late March. ®