The FCC Must Stay Focused on the Facts of Charter-Time Warner Merger

Stephen DeMaura
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Posted: Mar 07, 2016 9:38 AM
The FCC Must Stay Focused on the Facts of Charter-Time Warner Merger

As the Federal government continues to expand its reach and powers uninterrupted one of the areas that it has become increasingly active in is scrutinizing the mergers and acquisitions of companies. It is appropriate for federal agencies to act as impartial referees to ensure industries remain competitive and consumers are protected. Unfortunately, these agencies and lawmakers are being pressured and influenced more and more by outside actors operating to protect their own bottom lines by disrupting the free market.

The Federal Communications Commission is tasked with regulating competition in the telecommunications sector. But an agency with such an important task can also find its power abused by those looking to influence the outcome of investigations, or steer it toward issues outside its jurisdiction. For the FCC to be an effective agency, it is crucial that it works within its authority and ensures outsiders do not hijack any evaluations or investigations. The merger of Charter Communications, Time Warner Cable, and Bright House Networks has been scrutinized for months, and consumers are left in the balance. The FCC should ensure a fair and transparent review not one buoyed by political pressures.

Telecommunications is one of our nation’s most influential sectors, with a great capacity for growth and massive consumer reach. The Charter-Time Warner-Bright House merger would cause a significant shift in the industry, boosting competition and providing greater options in a sector that is currently overwhelmingly in the grip of one company.

Though there are clear benefits to the merger, it is important that the FCC considers the full impact of New Charter before it gives a decision on the transaction. In this process, as with every merger, it is normal for Congressional leaders and local citizens to share comments with the FCC. Unfortunately, some will use this opportunity to cherry pick letters to highlight their viewpoint and influence the outcome of the review.

One letter in particular was recently submitted by Senators Mike Lee and Amy Klobuchar, chairs of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights. The submission of this letter highlights the concerns of special interests trying to sway the FCC, but at the same time a read through illustrates the empty charges some are perpetrating against the merger.

In the letter, Senators Lee and Klobuchar simply ask the FCC and Justice Department to determine the motives of the merger and ensure they are in line with the public’s interests. As noted, this is a typical measure of practice for all mergers. The letter therefore brings nothing new to the conversation and certainly does not raise any significant concerns over the merger.

But taking credit for the letter is DISH Network’s Stop Mega Cable coalition, a thinly vailed campaign promoting the interests of DISH above those of the cable broadband industry. DISH likely pushed for strong language against the merger, but the final letter is subdued at best.

For example, while the senators urge a standard assessment on competition they then quickly note that "88 percent of households [will] have the choice of two or more broadband providers" under New Charter, "and there is little overlap among Charter, Time Warner Cable, and Bright House Networks". This is hardly a condemnation of New Charter’s impact on the industry. In fact, it confirms the argument that New Charter would actually add significant competition to cable broadband.

Stop Mega Cable’s letter is transparent this time, but efforts like these by special interests are not always so obvious. The FCC must be on the lookout for these kinds of tactics in order to uphold the integrity of the agency’s review. This is not to say all concerned voices are shadowboxes for industry competitors, it is simply to expose a growing trend in merger review processes that should be a major concern for the agency.

The FCC has the final say on important merger proposals. Like a referee, the agency should monitor transactions above the fray and not allow itself to be influenced by special interests. At the same time, the American public depends on the FCC to conduct fair reviews free of partisan policymaking. New Charter has been under review for months, and states like California and New York have given the merger its approval. In this last stage of review the FCC must remain neutral and work within its given authority as it grants the final assessment.