Netflix Backs Charter's Merger With Time Warner

Netflix said on Wednesday that it's supporting Charter's proposed merger with Time Warner Cable, provided Charter is required to follow through on its promise to offer free “interconnection” for three years.

“Charter's endorsement of the policy as an enforceable merger condition will ensure that consumers will receive the fast connection speeds they expect,” Netflix vice president Christopher Libertelli says in a new Federal Communications Commission filing. “Netflix believes this new policy and the commitment to apply it across the 'New Charter' footprint is a substantial public interest benefit.”

Charter recently applied to the FCC to acquire Time Warner and Bright House Networks for around $67 billion. Charter -- which will be called “New Charter” after the proposed merger -- promised in its application that it will follow the new net neutrality rules for at least three years, even if they are shot down in court.

The company also said it won't impose data caps on broadband subscribers, or charge customers based on the amount of data they consume, for at least three years.

Additionally, Charter promised to offer free “interconnection” for at least three years.

Last year, Netflix found itself dealing with customers who were complaining about choppy streams. The poor quality streams appeared to stem from problems at the “interconnection” points, where transit providers like Level 3 or Cogent attempted to interconnect with Internet service providers' networks.

Netflix ultimately resolved the issue by agreeing to pay four ISPs -- Time Warner, Comcast, Verizon and AT&T -- extra fees in order to interconnect directly with their servers.

While the online video company agreed to the terms, it also called on the FCC to prohibit broadband providers from charging interconnection tolls. “We'll never realize broadband's potential if large ISPs erect a pay-to-play system that charges both the sender and receiver for the same content,” Netflix CEO Reed Hastings wrote in Wired last year.

The company said in Wednesday's filing that Charter's new policy “is a welcome and significant departure from the efforts of some ISPs to collect access tolls on the Internet.”

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