The proposed merger of Charter, Time Warner Cable, and Bright House would create the second-largest cable company behind Comcast, at a time when it’s possible to access most of the content that was once exclusive to cable TV through streaming services. Yet the company that brings you HBO and CNN is concerned that a larger, stronger Charter might work to hold back progress in streaming video, the main competition for its cable service. Time Warner filed its concerns with the Federal Communications Commission.
Here’s a reminder, since the names and former relationships can make things confusing: Time Warner no longer owns Time Warner Cable: the media giant spun the cable company off on its own last decade, finally separating in 2009. Time Warner is the media company that owns and produces content for important channels like CNN, HBO, TNT, and Cartoon Network.
Time Warner’s concern is that a larger, post-merger cable company would control customers’ broadband connections, and might find ways to keep future developments in streaming content away from their customers. In a filing with the FCC about the proposed merger, the company expresses concern about how larger, more powerful companies that sell broadband and cable TV could hold back the business of streaming. Time Warner points out that “if the merger is approved, a combined Charter-Time Warner Cable-Bright House will attempt to harm the continued development of over-the-top video broadband competition.”
How can a broadband provider harm a streaming service? Comcast Universal is both a cable company and a content provider: remember that it exempts its own streaming service, the aptly named Stream, from the data usage caps that it imposes on broadband customers.
No way, Charter claimed in a blog post published today: they support over-the-top programming for two reasons. First, because it’s what their customers want. Second, and more importantly, because if content is available for customers to purchase directly, content providers (like Time Warner) will be forced to lower the prices that they charge cable companies and unable to sell content exclusively in bundles.
“If content is widely available, the price customers and service providers are willing to pay is lower,” writes The Charter Team. “It is simply Economics 101. Asking Charter to continue to pay the same rates despite increased availability of the content is akin to asking us to punish our customers for using our service.”