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Fresh Opposition Threatens Charter Deals

In little more than a week, roughly 1,000 new comments have flooded in to the FCC expressing concern over Charter's bid to acquire Time Warner Cable and Bright House Networks. The vast majority of the comments stem from a petition started by the programmer One America News Network, also known as OAN. Concerned that the mergers will leave OAN without a carriage deal, the network has asked supporters to weigh in with the FCC on the importance of maintaining a competitive landscape for independent programmers.

In sampling recent comments to the Federal Communications Commission (FCC) on the twin Charter Communications Inc. transactions, Light Reading found that many OAN supporters echoed language used by the programmer in its online petition. In that document, OAN accuses Charter of having "a history of unfavorable and anti-competitive terms to independent programmers," and says that Charter "flatly refuses to carry One America News Network." Noting that Charter has filed for bankruptcy protection multiple times over the last decade (although it ignores the company's successful turnaround in the last couple of years), OAN also argues that "to allow Charter to rapidly expand when it has had trouble simply running its own business and mistreats independent programmers isn't good for America."

Ironically, OAN clarifies that it's not officially opposed to the Charter purchases of Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks at this time, but that it wants to raise awareness of the issues that independent programmers face with cable distributors.

OAN isn't the only independent network with supporters who are voicing concerns. Aspire TV has also rallied viewers to submit comments to the FCC about the importance of keeping that network available in cable households. Like OAN, Aspire fears its reach will be severely curtailed if distribution partner Time Warner Cable is bought by Charter.

Of note, OAN and Aspire target very different audiences. While the former has a conservative bent and is meant to be a foil to Fox News, the latter is focused on African-American viewers, a demographic that has typically leaned to the left in American politics.

The plight of two programmers may not be enough to sway regulators one way or the other on the Charter acquisitions. However, the FCC has made it clear that it's studying the potential impact of the proposed mergers on programming and video distribution very carefully.

Separately, for example, the FCC has requested information in an effort to determine whether Liberty Broadband -- which would own close to 20% of post-transaction Charter and control 25% of voting power -- would be able to exert undue influence over the programming market by withholding or causing the withholding of "video programming from MVPDs or OVDs 'to favor or protect New Charter to increase New Charter's sales.' " Liberty Broadband has stated categorically that the law already prohibits it from doing so.


For more on cable market trends, visit the dedicated cable channel here at Light Reading.


The latest wave of negative responses to the Charter deals comes after initial positive comments filed primarily by representatives of local governments and community organizations. (See On Paper, Support Runs High for Charter/TWC.)

The National Association of Broadcasters (NAB) , Dish Network LLC (Nasdaq: DISH) and AT&T Inc. (NYSE: T) were among the first high-profile organizations to express significant concerns about the transactions. The United States Telecom Association (USTelecom) followed suit late last week, saying that, "Cable consolidation has reached a point where the further consolidation proposed by the acquisition of Time Warner Cable, Inc. (Time Warner) and Bright House Networks (BHN) by Charter Communications Inc. (Charter) (collectively, the “Applicants”) must be carefully scrutinized by the FCC." (See also Charter Acquisition Naysayers Have Their Day.)

US Telecom recommends that the FCC impose conditions on the deals that would prohibit the cable companies involved from "giving to or receiving from other incumbent cable providers any undue preferences," limit Charter investor and Liberty Chairman John Malone's ability to influence the new merged entity and prohibit both "New Charter and Dr. Malone's programming interests from engaging in anticompetitive self-dealing by precluding him from exercising any right to influence the operation of New Charter."

The collective opposition to Charter's proposed acquisitions -- as they stand today -- reflects the continued tangling of service provider and media interests, and ongoing fears that cable consolidation could harm competition.

Update: Charter notes that there are many independent programmers that have come out in support of the proposed acquisitions including TV One, BabyFirst, One World Sports, Crown Media, RFD-TV and The Blaze. Mark Cuban has also expressed his support as founder and chairman of independent network AXS TV.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

msilbey 11/19/2015 | 12:49:46 PM
Re: comments I believe Comcast can. The others are an open question for me, but Rutledge has proved a lot in his orchestration of Charter's turnaround. 
Ariella 11/19/2015 | 12:45:12 PM
Re: comments @msilbey yes, it will be interesting to see how it all plays out. Will cable be able to stand against those most formidable opponents?
msilbey 11/19/2015 | 12:41:01 PM
Re: comments There are still plenty of people in favor of the merger, though whether it's a majority, I don't know.  (See: http://www.lightreading.com/services/broadband-services/on-paper-support-runs-high-for-charter-twc/d/d-id/718581)

Ultimately the cable industry believes it needs to consolidate to be able to compete with Google, Amazon and more. New competitors = new need for scale. 

 
Ariella 11/19/2015 | 9:59:58 AM
comments People must feel very passionately about the issue. But are there a silent majority that are in favor?
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