WASHINGTON – Federal regulators announced Monday that they have approved Charter Communications’ acquisitions of Time Warner Cable and Bright House Networks in deals valued at $88 billion, ushering in further consolidation of the broadband industry.
The approvals create a broadband and cable television juggernaut at a time when consumers rely on the Internet as a utility but see their prices increase with few options for providers.
To address those concerns, the Federal Communications Commission and Justice Department imposed strong restrictions on the deals, including an order from the Justice Department that strictly prohibits the combined company from entering anti-competitive deals with programmers that would keep shows and movies off streaming services like Netflix and Hulu.
The FCC also imposed conditions to its approval to protect the nascent video streaming industry. The agency said Charter agreed that for seven years it will not impose data caps on users and will abide by net neutrality rules, even if the rules are overturned in a separate federal appeals court case.
“The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet,” said Tom Wheeler, the FCC chairman. He added there would be an independent monitor to ensure compliance with the conditions.
The combined firm will form the second-largest broadband provider, controlling 19.4 million broadband subscribers. It will also become the third-largest video provider, after Comcast and DirecTV, with 17.3 million customers.
The prospect of so much combined power has drawn strong protest from consumer groups and some tech companies. Dish Network has fought against the cable industry mergers, including Comcast’s failed bid for Time Warner Cable in 2014, citing concerns that Comcast had the incentive to give its cable TV and own streaming service preferential treatment to consumers over competitors like Sling TV, Netflix and other streaming providers.
Changes Western New Yorkers can expect:
• Consumers who currently purchase faster broadband service from Time Warner, with speeds of 30 megabits per second and 50 Mbps, are expected to receive bigger savings.
• Charter must allow existing Time Warner customers to keep their current bundled or standalone service “without material changes” for three years from the time that the merger is completed.
• Charter must offer standalone broadband service and high-speed Internet service to low-income customers at a price of no more than $14.99 per month, with download speeds of at least 30 Mbps.
• Charter has agreed to offer broadband service with download speeds of 30 Mbps and upload speeds of 4 Mbps for $14.99 a month, including installation fees and a cable modem. That program would be open to families who qualify for reduced-price school lunches as well as senior citizens receiving supplemental Social Security benefits.
• Time Warner has about 365,000 residential and commercial customers in Western New York for its cable television, phone and Internet services.