FCC limits order on Charter extending broadband service

A Charter Communications company service van

"When I talked to the FCC, I said I can't overbuild another cable company, because then I could never buy it, because you always block those", Rutledge said at the MoffettNathanson Media & Communications Summit in NY.

The FCC's approval of the Charter/Time Warner Cable merger a year ago required Charter to deploy broadband with download speeds of 60Mbps to at least two million residential and small business locations, of which at least one million would have to be in areas served by at least one other high-speed provider.

"The FCC's decision is compelling because the agency is simultaneously advancing the goal of affordable and universal broadband by requiring Charter to venture into unserved areas and by eliminating the threat of government-mandated uneconomic entry into smaller operators' markets", said Matthew M. Polka, ACA CEO, in a statement. Charter had initially agreed in May 2016 that it would provide high-speed broadband to 2 million of its new customers within five years. "Given our conclusions about competition in the broadband market, I am concerned that years from now, we will simply end up with still only one entity - New Charter - serving those "overbuilt" areas".

Americans without access to home broadband skew poor and rural, where it's more expensive for internet service providers to connect houses. The ACA argued that the overbuild condition will have devastating effects on smaller broadband providers. This is like telling two people you will buy them lunch, ordering two entrées, and then sending both to just one of your companions. Evercore ISI restated an "overweight" rating on shares of Charter Communications in a research report on Monday, February 27th.

Whether the FCC's decision will be a benefit or a bust remains to be seen. The FCC's new chairman, Ajit Pai, supported a move by Congressional lawmakers to undo an FCC rule that would force ISPs to gain customer consent before selling browsing data. Greater competition could lower prices.

When a merger involves FCC license transfers, the commission is required to review the deal to determine whether it serves the public interest.

Charter Chief Executive Tom Rutledge met with Trump at the White House last month to tout the company's investment and hiring plans. However, as Ars Technica pointed out, that amount of spending is really no change for the company, and that amount doesn't include adding any new customers.

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