IT&Software

US FCC limits broadband competition

US FCC limits broadband competition

The FCC's approval of the Charter/Time Warner Cable merger past year required Charter to deploy broadband with download speeds of 60Mbps to at least two million residential and small business locations, of which at least one million would have to be in areas served by at least one other high-speed provider.

The change has been implemented thanks to pressure from the American Cable Association, which represents smaller broadband service providers. Chartered is instead allowed to build out service to two million customers without service, and has no obligation whatsoever to extend service to customers who already receive service from another ISP.

In May 2016, Charter Communications acquired Time Warner Cable and Bright House Networks LLC for a total consideration of around $60 billion.

The "overbuild" requirement was instituted by Obama administration FCC chairman Tom Wheeler to encourage more competition in the high-speed Internet game, and was part of an agreement to build out access to 2 million new customers overall.

Under the revised order put in place Monday by the FCC, Charter will still be obligated to build out its broadband infrastructure to two million new households but will no longer be mandated to compete with other providers.

"Far from mitigating any problems of market power or leverage identified as consequences of the merger", it continues, "the overbuild condition exacerbates them by increasing New Charter's footprint and market concentration".

The sole remaining Democratic commissioner at the FCC, Mignon Clyburn, agreed with the decision. Under the new rules voted on by the FCC, Charter will still have to extend service to two million new customers.

"We are pleased to see the course correction in today's order to help ensure that artificial measures to inject competition will not undermine private investment initiatives or our nation's shared goals with respect to universal service in rural America", said NTCA CEO Shirley Bloomfield in a statement.

Gigi Sohn, a former top Wheeler aide, said the decision shows the Republican FCC is more focused on putting "incumbents first" than on competition.

"They can build out their networks but people won't be able to buy their service".

In 2014, an FCC report found that about 75% of consumers in the country have, at most, one provider to choose from for actual high-speed broadband service.

When a merger involves FCC license transfers, the commission is required to review the deal to determine whether it serves the public interest.


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