Charter will not impose data caps for seven years following combination with Time Warner Cable, Bright House Networks
In approving a major merger in the cable space, the Federal Communications Commission took the opportunity to include a consumer-friendly catch designed to ensure cord cutters have at least some protection.
Charter Communications is clear to finalize a $65.5 billion purchase of Time Warner Cable and Bright House Networks making the new combined company the third-largest multichannel video programming distributor in the country serving about 17.3 million customers. Further, the new company will have a combined 19.4 million broadband subscribers, making it the second-largest broadband Internet provider in the U.S. with customers in 40 states.
But, the FCC is requiring Charter to ensure no data caps are imposed on customers for seven years following the transaction. As the trend of abandoning cable bundles for standalone Internet and subscription to streaming platforms like Hulu, Netflix or HBO Go continues to impact cable companies’ bottom lines, data caps are regarded as a way to discourage that movement.
Shawn Knight addressed the operative issues in a recent Techspot piece: “ISPs, who once fed us lines about excessive bandwidth usage and network congestion in order to upsell people on higher-tier ‘business class’ Internet packages, are now essentially using the same tactics to punish cord cutters, many of which were likely former cable subscribers.
“They can’t stop people from ditching cable subscriptions, but they can make their streaming TV experience miserable enough that maybe they’ll come crawling back. Granted, none of them will come right out and say that to your face, but that’s exactly what they’re doing. Trust me, rationing your home broadband service each month in order to avoid overage fees isn’t much fun.”
FCC Chairman Tom Wheeler said: “Based on imposed conditions that will ensure a competitive video marketplace and increase broadband deployment, an order recommending that the Charter/Time Warner Cable/Bright House Networks transaction be approved has circulated to the commissioners. As proposed, the order outlines a number of conditions in place for seven years that will directly benefit consumers by bringing and protecting competition to the video marketplace and increasing broadband deployment. If the conditions are approved by my colleagues, an additional two million customer locations will have access to a high-speed connection. At least one million of those connections will be in competition with another high-speed broadband provider in the market served, bringing innovation and new choices for consumers, and demonstrate the viability of one broadband provider overbuilding another.”
