Unlike some of his counterparts at other major US broadband providers, Charter Communications President and CEO Tom Rutledge sounds like he may be willing to accept the imposition of a common carrier regulatory regime, albeit quite reluctantly.
Speaking on Charter Communications Inc. 's fourth-quarter earnings call Thursday morning, Rutledge said the Title II proposal outlined by Federal Communications Commission (FCC) Chairman Tom Wheeler yesterday may not be so terrible for his company, at least in the short run. Wheeler's proposal, while calling for a utility-style regulatory regime for broadband providers, would exempt them from rate regulations, tariffs, last-mile network unbundling and other types of restrictions they have feared.
"It doesn't look like it changes anything," said Rutledge, whose company has nearly 4.8 million broadband customers now after picking up 104,000 data subscribers in the fourth quarter. In any case, he noted, "it does look to be the law of the land."
Nevertheless, like leading executives at AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ) and Time Warner Cable Inc. (NYSE: TWC), Rutledge said he's worried about the marketplace uncertainty and confusion that a regulatory shift would introduce. Despite Wheeler's assurances, he's also worried about how the FCC might use its broadened broadband regulatory powers in the future. (See Fretting Over Title II .)
"It seems to me to be an excessive approach," he said, noting that Charter has never run into any net neutrality problems with Internet video providers. "I think we have a heavy-handed regulatory solution to a problem that doesn't exist. And while it doesn't change anything in any way, it's like someone having a bazooka pointed at you; that's uncomfortable."
Bazooka imagery aside, Rutledge said he's not sure what impact, if any, the adoption of Title II rules will have on Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed $67 billion acquisition of Time Warner Cable Inc. (NYSE: TWC) and Charter's corresponding trade of cable systems with the beefed-up Comcast. Several industry pundits are now predicting that the switch to Title II could jeopardize, if not doom, the Comcast-TWC deal, which would also wreak havoc with Charter's immediate growth plans.
Rutledge said he's still firmly committed to gaining the local, state and federal regulatory approvals required for Charter's end of the deals. But he admitted that he'd still be interested in renewing Charter's pursuit of Time Warner Cable for the right price if the Comcast purchase ends up falling through.
Under the right conditions, "obviously we'd be interested," he said. "But there's a lot of 'ifs' there."
— Alan Breznick, Cable/Video Practice Leader, Light Reading