Federal regulators gave the green light to Charter Communications’ proposed $78 billion mega-merger with Time Warner Cable on Monday, paving the way for a new broadband industry giant with 24 million customers in 41 states.
The deal, in which Charter would also absorb smaller rival Brighthouse Networks for $10.4 billion, has been fiercely opposed by public interest groups that call it just the latest example of a decades-long pattern of runaway consolidation in the telecommunications industry. Together, the new Charter and industry leader Comcast would become the nation’s two dominant broadband providers, controlling nearly two-thirds of the high-speed broadband market.
In a two-step move, the Justice Department’s Antitrust Division on Monday filed a civil lawsuit in federal court to block the merger, and simultaneously proposed a settlement that regulators say would resolve the issues raised by the lawsuit.
The settlement, which must be approved by a federal judge, forbids the new company from using its market power to muscle programmers into withholding their content from online video providers like Netflix and Hulu.
Federal Communications Chairman Tom Wheeler, whose agency must ensure that the deal serves the public interest, separately announced that he has circulated an order to his colleagues recommending that the deal be approved. Wheeler said the FCC has imposed its own conditions on the deal, including a seven-year prohibition on usage-based pricing and data caps. The new company will also not be permitted to charge interconnection fees over that time.
“THERE’S NOTHING ABOUT THIS MASSIVE MERGER THAT SERVES THE PUBLIC INTEREST.”
“This merger would have threatened competition by increasing the merged company’s leverage to demand that programmers limit their licensing to these online providers,” Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Antitrust Division, said in a statement.