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No Such Thing as a Good Merger—Tracy Rosenberg

Why the Charter/Time Warner Merger Is Bad News

On January 26, the California Public Utilities Commission (CPUC) will hold a poorly publicized public hearing in LA on whether to approve the merger of Charter Cable with Time Warner and Bright House Networks. People with good memories may recall that not long ago, a merger between Comcast and Time Warner was the subject of a public hearing. That LA hearing played a really big role in the Comcast merger's demise, as Southern Californians showed up in droves to avoid forcible absorption into “America's Most Hated Company (two times in a row!).

But Charter Cable is no happy ending. Chief Charter shareholder John Malone was dubbed the “Darth Vader” of cable for his aggressive (and shady) business practices as head of TCI. The nation's single largest landowner in 2011, Malone, if this merger goes through, will own 25% of the second largest broadband provider in the country (after Comcast), and will have a huge influence on the future of the Internet.

So it ain't just about cable.

What are Charter and Malone's plans for the second biggest broadband provider in the country? It bears repeating that Charter is a player in the plethora of industry lawsuits against the FCC's net neutrality regulations, which are wildly popular with Americans who flooded the FCC with a record-breaking number of comments in the lead up to the February rule-making. It was probably the only FCC proceeding to ever be featured on late night television as John Oliver begged FCC chief Tom Wheeler not to be the “dingo who steals the baby”. Wheeler wasn't a dingo as it turned out, but the industry has not taken their defeat lying down.

But merger applicants always come to regulators bearing sweets and Charter is no exception. They have pledged not to engage in a variety of unpopular and anti-competitive practices: throttling, blocking, paid prioritization, data caps, zero rating and interconnection fees.

For three years. And just for three years. After that, we'll just have to take their word for it.

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Charter's expert paid witness, an Ivy League economist named Fiona Scott Morton assures us: “Current trends suggest that broadband competition will limit any anti-competitive conduct in future years”.

The current trend is that 55% of Americans can only access one source for high-speed broadband service and most of the rest can only choose from two. If the premise of competition is that consumers can dump services they don't like and replace them with services they like better, where are consumers supposed to go?

Captive audiences don't usually get the best deals from big corporations. The record of increased media concentration is clear: higher prices, worse service and less choices for you. Post-merger, Comcast and New Charter would corner the market on 90% of all high speed broadband access in California. That's a duopoly. And it's not competitive in the least.

So if you depend on the Internet to do your work, connect with your friends and family and access information about the world, you've got a lot to lose.

Come out on January 26th at 6:00pm to the Junipero State Building at 320 West 4th Street in Downtown LA and take your one or two minutes to say “Hey, public here, and I don't think I'm getting much out of this deal.


Charter Cable Purchase of Time Warner Cable and Bright House Networks Application
Public Participation Hearing
Tuesday January 26 at 6:00pm
Junipero Serra State Building, Carmel Room
320 West 4th Street
Los Angeles CA

Tracy Rosenberg