Senators Raise Concerns About Charter Merger

Consumer advocacy groups have warned for months that Charter's proposed merger with Time Warner Cable and Bright House Networks could harm online video distributors.

Today, the leaders of the Senate antitrust committee are raising the same concern.

"We urge you to closely review these transactions to ensure that they do not impede new, developing options for consumers to receive video content," Sens. Mike Lee (R-Utah) and Amy Klobuchar (D-Minnesota), write today to the Federal Communications Commission and Justice Department. Lee chairs the Senate antitrust committee, while Klobuchar serves as ranking member.

The letter repeats assertions by merger opponents that Charter and Comcast together will control between 70 and 90 percent of broadband connections faster than 25 Mbps in the U.S.

"Some worry," the lawmakers write, "that such a dominant position would allow the two companies, without overtly colluding, to undermine the ability of online video distributors to offer a viable alternative to cable services."

Charter has said it has no motive to hinder online video distributors because Web video is sparking consumers' demand for high-speed broadband. The company also has promised to follow net neutrality rules for three years post-merger, and to avoid imposing data caps or usage-based billing for three years.

Companies like Dish and HBO have not been persuaded by those assurances. They have argued in separate FCC filings that the merger could harm their companies' ability to reach broadband users. Netflix, on the other hand, has gone on record as supporting the deal.

"The FCC recognized that companies offering both video and broadband service have an incentive to interfere with online distribution services," Lee and Klobuchar write. "A critical issue here is whether this transaction would increase Charter's incentive and ability to interfere with online video distribution services."

While the lawmakers aren't calling for the merger to be nixed, they clearly suggest that critics' points deserve serious consideration.

For its part, Charter obviously expects the merger to close. The company recently told investors that it expects the deal to gain approval by next month.


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