Charter/Time Warner Cable Merger Plan Great For Everyone, According To Charter

timecharterlogoA couple of weeks ago, the FCC collected everyone’s comments about why Charter should or should not be allowed to go through with buying Time Warner Cable and Bright House Networks in one massive merger. The next step in the process is for Charter to get to respond as to why they think the yea-sayers are right and the nay-sayers are wrong, and they submitted that response this week.

In their filing (95-page, absurdly slow-loading PDF), Charter rebuts all the opponents’ talking points with points of their own. Charter, naturally, claims that this merger is more or less the best thing since sliced bread and will bring better internet, more competitive TV, and other boundless blessings on subscribers nationwide.

The FCC is tasked with ruling if telecom transactions serve the public interest, and so Charter’s main argument is that this one will. Summarized, Charter’s key claims are that:

  • Making Charter bigger will increase broadband competition
  • Making Charter bigger will allow it to support online distribution of programming better
  • Making Charter bigger will allow it to compete more in the business broadband space
  • Merging will improve operating efficiency and therefore accelerate innovation
  • Merging Charter will allow the business to provide better customer service

The unstated but implied reasons Charter would be able to bring all these improvements are, mostly, that Time Warner Cable currently kind of sucks. Charter’s filing touts the commitment New Charter would bring to not having data caps or usage limits (as TWC currently does) and also their commitment to having excellent customer service (as TWC currently does not). Charter also says that merging would allow them to expand a program Bright House currently has for low-income families to receive reduced-price broadband access to the full post-merger footprint, much as Comcast said they would expand their Internet Essentials program to TWC’s footprint if those two companies merged.

Charter also specifically rebuts objectors’ claims that the merger is anticompetitive or harmful to the public interest. The filing says that “opponents’ broadband market definitions are out of step with economic reality and ignore major competitive forces” in the broadband marketplace that is.

Charter starts that argument by essentially rejecting the FCC’s 25 Mbps minimum definition of “broadband” speed. Because that threshold is aspirational and future-looking, Charter posits, it’s basically irrelevant to the world of today, 10 Mbps is what really matters, and competition, at that speed, exists thanks to DSL and mobile. If you must look to the future, Charter continues, then you have to assume that the mobile market keeps improving, that 5G takes off, and that all the businesses that have promised to run fiber in various cities actually make good on it — therefore, making the environment competitive.

Charter also asserts that although the national footprint completely doesn’t matter as a metric, their plan to buy TWC is not as bad as Comcast’s because after the deal is done they would control a much smaller percentage of said national footprint anyway, clocking in with less than 30% of the nation’s high-speed broadband subscribers. And as for lessening geographic competition locally, Charter points out, this merger wouldn’t do that because the three companies already have no overlap in service area (which, indeed, cable companies rarely do).

The filing also rejects opponents’ assertions that a merged mega-Charter could wreak havoc at the peering or interconnection level by pointing out that to date, Charter has not done so and therefore would not do so in the future, because the marketplace is competitive and doing so would make them lose money. Even if they wanted to. Which they don’t.

Charter does point out that although they are a cable company, they know perfectly well that the money and the future are all in broadband and that therefore, anything that screwed with customers’ access to OVDs (online video providers like Netflix, Amazon, and others) would backfire. “New Charter has no incentive to harm OVDs in the first place,” the filing says. “It is in New Charter’s interest to promote OVDs, both because OVDs are the linchpin that will drive broadband subscription growth into the future and because blocking OVDs would be unprofitable.”

Opponents to the merger now have another ten days to reply to Charter’s reply to their objections. After that, the comment generation section of the pleading cycle closes. That means the proceeding moves from the “public shouting” stage to the “FCC deliberating” phase. The informal shot clock the FCC is using for this transaction would, barring any holdups, put the deadline for a decision in early March.