Charter pulls request seeking early end of ban on data caps, paid peering

Charter Communications has dropped a petition asking the FCC to sunset conditions tied to its 2016 acquisition of Time Warner Cable and Bright House Networks. Those conditions kept the cable operator from implementing usage-based broadband policies, including the use of data caps, and striking paid peering deals.

The FCC announced Charter's decision in a public notice posted Tuesday but did not elaborate on the reasoning behind Charter's decision.

Charter reasoned that activity at a DC court related to the FCC's merger order and the ongoing pandemic weighed into its decision.

"In the months since this petition was filed according to the timeline and process outlined by the FCC in our Merger Order, a number of conditions have been met, nullified, or vacated by the DC Circuit Court of Appeals," Charter said in a statement. "In light of the ongoing severity of the global pandemic and its effects on our customers, we want to offer them the assurance that they will continue to benefit from unlimited access to broadband and the accompanying financial certainty it provides during these trying times, and therefore have withdrawn our petition."

Changing political landscape

Charter's decision to pull back the petition also enters the picture amid major changes to the US political landscape. Most notably, it happens to fall on the eve of the inauguration of President-Elect Joe Biden and changes at the FCC that could arrive following the departure of current Commission chairman Ajit Pai. There are concerns among cable operators and other ISPs that an FCC under the Biden administration might try to bring back network neutrality rules that were rolled back by Pai's FCC, and possibly put usage-based data policies under closer scrutiny.

Also of note: A group of Massachusetts legislators has recently urged Comcast to pull back the recent extension of usage-based residential broadband data policies in the northeastern US, arguing that they consider the move a "perversion" of network neutrality principles.

Additionally, a group of major US broadband service providers, including Charter and Comcast, are catching heat from Democrats in the House Energy & Commerce Committee for the use of data caps and/or for raising service prices during the pandemic. Comments to a litany of questions related to those concerns are to be submitted by January 25, 2021.

Charter originally petitioned last June for the FCC to consider putting an early halt to data cap and paid peering prohibitions tied to the Time Warner Cable and Bright House Networks deal. Charter asked for those conditions to sunset at the five-year mark – May 18, 2021, – rather than having the FCC extend them for the full seven-year period.

In its original petition, Charter acknowledged that the ban on usage-based pricing and data caps was put in place over concerns that the cable operator could use such policies to hinder the online video distributor (OVD) market from expanding and competing. But the MSO argued that the OVD market has since "flourished" and become hotly competitive despite the presence of caps and usage-based policies from other US telcos and cable operators.

Charter also argued there's "compelling evidence" that the conditions attached to the 2016 merger are "no longer in the public interest" and that lifting the ban would help to level the playing field between Charter and other broadband providers that are not subject to such prohibitions.

Roku fought petition

Roku objected and urged the FCC to deny Charter's petition. The Commission, Roku argued, "should remain vigilant against any efforts by internet service providers ("ISPs") to weaken constraints on their power to implement anti-competitive measures … Data caps should become a relic of the past."

Beyond the situation at the FCC, the relationship between Charter and Roku has been frosty. Last month, Roku blocked access to Charter's Spectrum TV app after the two sides were unable to cut a new deal.

Incompas, an Internet and competitive networks association that also opposed Charter's petition, called Charter's decision "a win for Open Internet."

"The withdrawal of the Charter data caps petition is good news for consumers and open internet advocates," Incompas CEO Chip Pickering said in a statement. "Pressure from Congress, consumer groups and small business leaders helped walk back the cable giant, but it’s a clear sign for why we need strong interconnection and open internet policy on the books to prevent these attempts to raise prices and inflate consumer' bills."

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— Jeff Baumgartner, Senior Editor, Light Reading