Citing “dramatic changes in the online video marketplace” since its 2016 merger with Time Warner Cable, Charter Communications is seeking regulators' approval to impose data caps on consumers, and to charge “interconnection” fees to online video companies that connect directly with Charter's servers.
When the Federal Communications Commission approved the merger, the agency required Charter to refrain from imposing usage-based billing or interconnection fees for seven years.
Charter now argues that the growth of online video services justifies ending those conditions by next year.
“The online video distribution marketplace is almost unrecognizable compared to what existed in 2016,” Charter writes in a petition filed last week with the FCC.
The company says that other large broadband providers -- including Cox and AT&Ts U-Verse -- either cap data or bill consumers based on the amount of data consumed.
“They are able to do so because, unlike Charter, they are not subject to a condition that artificially and unilaterally restricts the packages available to their customers,” Charter writes.
Charter adds that other Internet service providers' data caps haven't harmed the market for online video.
“Consumers have never had more online video choices,” the company writes.
But advocacy groups have argued that data caps on wireline service are often arbitrary, especially when companies impose caps regardless of whether there's congestion in the network. Consumer advocates also argue that data caps and usage-based billing by cable companies give subscribers an incentive to watch video through pricey cable TV offerings, as opposed to streaming services.
Charter also wants to be able to charge online video providers interconnection fees on online video distributors like Netflix, arguing that other broadband providers have been free to impose those fees since 2018, when the Obama-era net neutrality rules were revoked. (The Obama-era regulations called for the FCC to take a case-by-case approach to interconnection fees.)
“Letting the Interconnection Condition expire in 2021 is in the public interest,” Charter writes. “Competition is flourishing, with [online video distributors] enjoying both market power and the availability of interconnection alternatives.”
Matt Wood, vice president of policy and general counsel at advocacy group Free Press, calls Charter's request “concerning.”
He says one concern is that new interconnection fees imposed by Charter on large video distributors like Netflix or Google could trickle down to their subscribers.
“It could wind up meaning higher prices for customers of video streaming services,” Wood tells MediaPost.
The FCC is requesting comments from the public by July 22.