FCC reverses Charter Communications 'overbuild' requirement

A Charter Communications company service van

Never one to miss a chance for a simile, FCC chair Ajit Pai likened the Charter overbuilding requirement to "telling two people you will buy them lunch, ordering two entrées, and then sending both to just one of your companions".

"It has become clear that forcing New Charter into competing with another carrier, incentivizes the company to overbuild where the weakest potential competition now exists", Clyburn writes in a statement.

As an approval condition for Charter's purchases of Time Warner Cable and Bright House Networks, the FCC ruled that the MSO must extend broadband-25 Mbps download speed or higher-to 2 million additional US residences.

The new Republican-led United States Federal Communications Commission (FCC) has upended a few rules imposed by the Democratic former FCC chairman, including removing an opt-in requirement allowing internet service providers (ISPs) to sell web browsing information. "As we work to ensure that all Americans have access to broadband, we should focus on targeting service to areas that are truly unserved, not attempting to manufacture competition through government mandated buildout".

One million of those homes had to reside in areas already served by other internet providers-a condition vehemently opposed by the American Cable Association, which did not want its small-operator constituents having to compete with the nation's No. 2 cable company.

A group of 38 small- and medium-sized broadband providers sent a similarly-themed letter to the FCC in March of this year [PDF] supporting the ACA's petition.

But on Monday the FCC lifted the provision that required Charter to expand into a competitor's service area.

Pai was serving on the FCC as a commissioner when the Charter-Time Warner Cable merger was first proposed, but voted against the agreement-not because of the merger of two major cable providers, but because he felt the FCC's stipulations for approval were too onerous.

Whether the FCC's decision will be a benefit or a bust remains to be seen. Pai also objected to the overall requirement of building to two million new customer locations, saying the number and had no "rational connection with the merits of this transaction or public policy". "This FCC is bound and determined to make sure incumbents don't have to compete". Last month, Charter CEO paid a visit to the White House, where he got an Oval Office photo op by pledging $25 billion in investment over the next four years. "It's really about overbuilding telephone companies".

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