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Looming Charter-TWC Merger Could Hurt Video Streaming, Advocates Warn

Anti-merger groups warn that if safeguards aren’t put in place, the merger could be a threat to over-the-top streaming services.

by Kari Paul
Mar 17 2016, 11:00am

Photo: flash.pro/Flickr

The Federal Communications Commission is reportedly close to circulating an approval order on a merger that would allow Time Warner Cable and Charter cable to merge into a mega company.

The Wall Street Journal reported Wednesday that FCC Chairman Tom Wheeler could circulate a draft of the approval order as early as this week. If allowed to merge, the two companies would become the second largest cable company in the United States, according to the Journal. A spokesman for the FCC declined to comment on the decision as it is still under review, but noted the agency is on day 172 of its informal shot clock of 180 days, a rough benchmark for evaluating potential changes like these.

Stop Mega Cable, an anti-merger coalition comprised of telecommunications companies and public interest groups, said in a statement on Wednesday that "difficult questions that still must be addressed" as the decision moves forward.

Concerns about the merger include its potential monopoly in the cable industry, as well as its potential effects on competitors like online video content from over-the-top providers like Chromecast, Tivo, DISH's Sling TV, and others. Jeff Blum, senior vice president at DISH and member of Stop Mega Cable said Charter has many incentives to go after over-the-top providers.

"Because of this, it is our urge the merger should be rejected, but if the FCC decides to approve it they need to solve for these harms," he said. "They need to be sure all these tools at their disposal can't be used to harm over the top providers."

The deal comes after the failure of the Comcast-Time Warner Cable deal that was blocked by the Department of Justice in 2015 over concerns that it was anti-competitive. The FCC has reportedly been discussing safeguards to boost competition between online video streaming that were not included in the previous merger. These could include caveats preventing Time Warner Cable-Charter from regulating content companies can offer in their contracts, data caps, and usage fees. However, Blum said as it stands many of the same looming problems of a merger still exist.

"The Comcast-Time Warner merger was a category was a category five hurricane, and Charter-Time Warner is a category four––it's still really bad," he said.

In addition to getting the green light from the FCC and DOJ, the companies will have to get approval from California, a decision that is slated for May, Charter told the Wall Street Journal.