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ACA Troubled By FCC’s Charter “Overbuild” Condition

FCC Failed To Tailor The Merger Condition To Enhance Competition

PITTSBURGH, May 10, 2016 - American Cable Association President and CEO Matthew M. Polka issued the following statement in response to the Federal Communications Commission's approval of Charter Communications' acquisitions of Time Warner Cable and Bright House Networks:

"ACA is troubled that the FCC imposed an overbuild condition on new Charter, especially because it is not tailored to areas where additional entry is most needed -- namely, where prices exceed those offered in urban areas and network performance failed to meet the FCC's benchmarks.

"The requirement on Charter to overbuild competitors will harm consumers in two ways.  First, it will harm Charter's customers by preventing Charter from investing its resources most efficiently, such as by upgrading its networks to higher speeds.  Second, it will harm customers of local, small providers when these customers are satisfied with their existing service.

"Such harm to smaller providers and their customers is very likely because new Charter, using its significant scale advantages made possible by the FCC's approval, will have an economic incentive to choose locations served by smaller providers because Charter can most easily drive them out of the market, leaving Charter as the only provider.  The condition lacks limitations on the locations that count toward meeting the obligation, such as those that are most in need of competition or served by other large Internet Service Providers (ISPs).

"It's hard to understand why the FCC would impose a so-called public interest oriented overbuild condition on Charter that will result in Charter gaining even more subscribers.  Ironically, it increases the likelihood of a nationwide Comcast-Charter duopoly, exacerbating the putative harm that the FCC seeks to address through other conditions.

"Interested parties were not given a reasonable opportunity to weigh in on the impact of this condition before its adoption.  Parties were given less than seven business days' notice of this condition before the Order was approved, and it's been reported that some Commissioners voted on the merger in even fewer days.

"ACA urges the FCC to reconsider its action on its own and amend the condition so that at a minimum, it would be satisfied by builds to locations in areas served by only larger providers."

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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