Saturday, May 7, 2016

FCC Confirms Approval of Charter, Time Warner Cable Merger

(Reuters) -- The FCC confirmed on Friday that it had voted to approve Charter Communications Inc's acquisitions of Time Warner Cable Inc and Bright House Networks. The deals, which would create the second-largest U.S. broadband provider and third-largest video provider, now need approval from regulators in California. A state administrative judge last month recommended that California's public utilities commission approve the deal. The decision is expected at a May 12 hearing. Tom Rutledge, president and chief executive of Charter, said in a statement Friday that the transactions have "significant benefits" including greater competition, broader access to affordable broadband, and new U.S. jobs. The FCC-imposed conditions "are largely extensions of the longstanding consumer friendly values and practices of our company," Rutledge said. A majority of the five-member FCC voted to approve the deals earlier this week. The FCC said in a statement Friday that an "order detailing the commission’s reasoning and the conditions will be issued in the coming days." Charter has valued its deal for Time Warner Cable at $56.7 billion, excluding debt, and the acquisition of Bright House at $10.4 billion. The U.S. Justice Department gave antitrust approval to the acquisitions with conditions on April 25 and earlier Charter and Time Warner Cable shareholders approved the companies' deal.

The Justice Department's approval carried conditions designed to protect competition, coming at a time when the pay television industry faces stagnation due to new competition from over-the-web rivals like Netflix Inc and Hulu.

The Justice Department said Charter agreed to refrain from telling its content providers that they cannot also sell shows online as part of the approval process.

The conditions placed on FCC approval would require Charter to extend high-speed internet access to another two million customers within five years, with one million served by a broadband competitor, FCC chairman Tom Wheeler said.

Charter, backed by billionaire John Malone's Liberty Media Corp, had pursued Time Warner Cable as far back as 2013.
The two companies had acrimonious exchanges in 2013 and early 2014 that ended with Time Warner Cable rejecting unsolicited approaches by Charter and instead finding a white knight in Comcast Corp, the No. 1 U.S. cable services provider, which ultimately abandoned the transaction.

Separately, the FCC on Tuesday approved European telecoms group Altice NV's acquisition of U.S. cable company Cablevision Systems Corp in a $17.7 billion deal that includes assumption of debt. The Dutch firm still needs approval from the state of New York and New York City. If the deal is approved, Altice would become the fourth largest U.S. cable provider. Cablevision has 3.1 million subscribers, mostly in New York, New Jersey and Connecticut.