USTelecom Seeks Conditions on Charter-Time Warner Cable Merger

A trade organization representing AT&T, Verizon and other incumbent telephone companies has asked the Federal Communications Commission to impose conditions on Charter Communications’ pending acquisition of Time Warner Cable.

USTelecom, a Washington, D.C.-based trade group, on Thursday called on regulators to prohibit Charter and Time Warner Cable from giving to other cable companies or receiving from them “undue preferences.” In comments filed with the FCC, USTelecom’s Jonathan Banks also said the agency should prohibit John Malone – whose Liberty Broadband will be the single largest shareholder in the merged company – “from engaging in any anticompetitive self-dealing” by barring him from asserting the right to influence the combined operation.

“The additional consolidation of the cable industry contemplated by this transaction, and the potential for its further concentrating control over must-have video programming, is of significant concern to USTelecom’s small, medium and large member companies,” said Walter McCormick, president of USTelecom, in a statement. “This concern is exacerbated by the regulatory disparity that exists in the broadband marketplace today, where telephone companies are subject to rules, restrictions and oversight that do not apply to their cable competitors.”

USTelecom’s board of directors features representatives from telecommunications companies of various sizes, such as AT&T, CenturyLink, Hawaiian Telcom, Pottawatomie Telephone Company, Windstream Communications, Western New Mexico Telephone and Verizon.

Justin Venech, a Charter spokesman, did not immediately respond to a request for comment on USTelecom’s commentary.

Charter in May announced an agreement valued at $78.7 billion to acquire Time Warner Cable. Charter also has amended an agreement to acquire Bright House Networks for $10.4 billion. If the deals close, Charter will serve 23.9 million customers in 41 states.

In a separate FCC filing Thursday, an organization (ITTA) that represents midsize communications companies, raised concerns that the merged cable company “would create a much larger, vertically integrated entity with considerably greater market power that has the incentive and ability to hinder facilities-based video competition, and consequently broadband competition, to the detriment of consumers and the public interest.”

But Bright House Networks, Charter and Time Warner Cable declared in an earlier FCC filing that the transactions will lead to a number of public benefits, including expanded broadband service and increased competition in the enterprise market.

“Thanks to New Charter’s broadened footprint and increased regional density, as well as its $2.5 billion commitment to expanded commercial buildout, the transaction will heighten competition among providers of enterprise services,” the cable companies wrote in the Nov. 2 filing. “Businesses will multiple locations will find that Charter serves more of those locations than any of the applicants does individually.”

The companies also brushed aside enterprise-related concerns raised by AT&T, noting that the commentary comes on the heels of the FCC’s approval of AT&T’s merger with DirecTV and “appear related to AT&T’s own competitive position, rather than any harm to competition.”

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