Planned Charter Mega-Merger Does Nothing to Benefit Customers or Boost Competition

WASHINGTON — Charter Communications on Tuesday announced plans to acquire Time Warner Cable in a deal valued at $56.7 billion. Charter also confirmed that it would acquire Bright House Networks, a smaller cable company, for $10.4 billion. 

The combined mergers would grow Charter’s customer base to approximately 24 million, creating the nation’s second largest cable provider behind Comcast. 

Free Press Research Director S. Derek Turner made the following statement:

“These potential mergers won’t make Charter as massive as a merged Comcast-Time Warner Cable would have been but they raise similar public interest concerns, and the FCC should apply the lessons learned in its prior review here.

“The cable platform is quickly becoming America's local monopoly broadband infrastructure. Charter will have a tough time making a credible argument that consolidating local monopoly power on a nationwide basis will benefit consumers. Indeed, the issue of the cable industry's power to harm online video competition, which is what ultimately sank Comcast’s consolidation plans, are very much at play in this deal.

“Ultimately, this merger is yet another example of the poor incentives Wall Street’s quarterly-result mentality creates. Charter would rather take on an enormous amount of debt to pay a premium for Time Warner Cable than build fiber infrastructure, improve service for its existing customers or bring competition into new communities.

“We will carefully examine Charter’s case, in particular its arguments for why this transaction is supposedly better for competition in the broadband and pay-TV markets than new investment. Charter needs to explain why this consolidation will improve competition, and a simple argument of scale won’t work here. Charter’s network is already superior to TWC’s and that of other large cable companies, which proves that you don’t need to become a colossus to succeed in this business.”