FCC Forces Charter to Overbuild 1 Millon Homes

As often is the case, the U.S. Federal Communications Commission put some conditions on its approval of the merger between Charter Communications and Time Warner Cable.

Broadly, Charter has agreed to not impose broadband usage caps on its customers for seven years.

Charter also will provide “no charge” interconnection for online video providers and will be subject to  restrictions on its ability to keep programming from being available on online platforms.

Charter furthermore will offer high-speed broadband to two million more homes and offer a low-income broadband program for eligible households.

Somewhat unusually, the FCC also requires Charter to “overbuild” at least a million households already served by another cable TV operator offering high speed access of at least 25 Mbps downstream speeds.

That last clause is unusual. It essentially requires that Charter compete with another cable TV operator, something cable TV operators have been historically loathe to do.

Predictably, an organization representing small cable operators is worried that provision will mean not only competition, but ruinous competition for its members.

American Cable Association President and CEO Matthew M. Polka says harm will occur because Charter has scale advantages, and will “have an economic incentive to choose locations served by smaller providers because Charter can most easily drive them out of the market.”

Of the merger conditions, it is the requirement to overbuild which is the most unusual.