Commentary

FCC Questions Charter, Time Warner About Online Competitors

Regulators who are evaluating Charter's proposed $55 billion takeover of Time Warner want more information about their policies regarding online video distributors like Netflix.

In a request for information unveiled on Tuesday, the Federal Communications Commission asks both companies to produce any documents that would shed light on their strategies for competing with companies that stream video online, including Netflix, Hulu, Amazon and HBO Now.

The FCC also asks the companies for any documents examining the impact caused by cord-cutters and cord-shavers, as well as people who have never purchased cable video subscriptions.

Regulators have given Charter and Time Warner until Oct. 13 to submit their responses.

Charter has already vowed to avoid usage caps for at least three years after the merger closes. Charter also said it will use a "settlement-free" peering policy -- meaning that it won't charge companies like Netflix extra fees to connect directly to Charter's network -- for at least three years.

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But the 57-page document -- sent to both companies -- indicates that the FCC still has concerns about whether the increased cable consolidation will harm the relatively new online video business.

Consumer advocates expressed similar concerns earlier this year, when Charter first proposed taking over Time Warner and Bright House Networks.

That's because the merged company -- which will be called "New Charter" -- would control at least 20% of home broadband connections in the U.S. Advocates previously warned that New Charter's market power could position it to thwart “over-the-top” services like Netflix or Hulu. For instance, if New Charter imposed usage caps on 20% of home broadband users in the country, they might be less inclined to watch movies or TV episodes through an over-the-top service.

Charter's promise to avoid usage caps obviously addresses that concern -- but only for the next three years. The company's longer-term strategies remain unknown.

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