Feds OK $78B Charter-|Time Warner Merger

(CN) — The chairman of the Federal Communications Commission and the Justice Department on Monday approved Charter Communications' $78 billion acquisition of Time Warner Cable and a $10.4 billion purchase of Bright House Networks.

The four other FCC commissioners still have to vote to accept chairman Tom Wheeler's recommendation, likely a formality in this instance.

Several conditions came along with the feds' approval, including a prohibition on Charter setting data caps and charging customers based on usage and charging interconnection fees. Charter would also be required to extend high-speed Internet access to an additional 2 million customers within five years.

These conditions would be in place for seven years.

"The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet. Thus, we continue our close working relationship with the Department of Justice on this review," Wheeler said in a statement.

Charter had originally submitted its bid to purchase Time Warner and Bright House Networks in 2015. This followed Comcast's failed bid to buy Time Warner the same year.

Charter CEO Tom Rutledge is expected to run the merged companies.

"We are pleased that Chairman Wheeler has submitted the proposed conditions for consideration by the full commission and that the Department of Justice has submitted its agreement for approval by the court," Rutledge said in a statement.

After the deal is completed, Charter will be the third-largest multi-channel video provider behind Comcast and AT&T, which bought DirecTV last year. Charter would be the second-largest home Internet provider, surpassed only by Comcast, and would have 23 million customers in 41 states.

The company still needs approval from the full FCC and the California Public Utilities Commission, which is scheduled to vote on May 12.

Comcast withdrew its $45 billion bid to acquire Time Warner after regulators expressed concern over such a merger's impact on consumers.

Charter, back by billionaire John Malone's Liberty Media Corp, previously pursued Time Warner Cable in 2013. That bid ended the following year, with Time Warner rejecting the unsolicited proposals as too low and welcoming Comcast's merger bid — struck down by the feds in 2015.

Craig Aaron, CEO of the consumer group Free Press, criticized the approval by pointing out that the $27 billion in debt Charter is taking on would likely be passed along to subscribers.

"There's nothing about this massive merger that serves the public interest. There's nothing about it that helps make the market for cable TV and Internet services more affordable and competitive for Americans," Aaron said.

Twenty-two public interest groups sent a letter in March urging the FCC to block the proposed merger.

Follow @SeanDuffyCNS

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