Charter’s $67 Billion Cable Merger Hinges on the Cord Cutters

Emily Steel, who covers media for The New York Times, and Cecilia Kang, who writes for The New York Times from Washington (DC) about technology policy discuss the Charter Communications/Time Warner Cable/Bright House Networks merger.

Kang says, "It looks as if Charter, a small cable company with big ambitions, will find rare success. The Federal Communications Commission shot down two big mergers in the last five years but is about to approve Charter’s bid for Time Warner Cable and Bright House. The acquisitions will create the second-largest broadband provider, after Comcast, with 19.4 million subscribers, and the third-largest video provider, after Comcast and DirecTV, with 17.3 million customers. The combined company will span 40 states and include big markets such as Los Angeles and New York. The creation of such a giant cable and Internet company upsets consumer advocacy groups, which say a lack of competition has led to increased prices and poor customer service. But the FCC thinks the deal won’t harm consumers because the companies don’t really compete in the same markets. While Comcast made a similar argument in its failed bid for Time Warner Cable, the FCC was more skeptical in that case because Comcast’s big media holdings with NBCUniversal held the potential for a conflict of interest. Charter and Time Warner Cable have also persuaded regulators that together, they’ll be able to bring faster broadband to more households. The big focus at the FCC has been on how this deal will affect the fastest-growing area of media: video streaming. Emily, what do people in the media and tech industries think?"

Steel responded, "Streaming has definitely been a hot topic. The big fear is that a gigantic Charter will have both the power and the incentive to hurt rival streaming services. It also could hinder the invention of other new offerings. If Charter is selling traditional cable service, why would it want to ease the way for a new set of competitors? Both Dish and Time Warner, the parent company of HBO, have warned regulators that Charter’s takeover could alter the future of streaming."