US regulator approves Charter-Time Warner Cable merger with conditions
26 April 2016
The US federal regulators yesterday approved the Time Warner Cable and Bright House acquisition by Charter Communications with conditions, a move that would alter the pay-TV and Internet-service market in the US.
The US Federal Communications Commission (FCC) and Justice Department (DoJ) imposed several conditions for seven years on the acquisitions aimed at protecting streaming video companies like Hulu and Netflix.
The DoJ approved the deal, subject to court approval, while the FCC chairman circulated a draft order to approve both mergers. The deal still requires the approval of the California state utility regulator.
Charter had in 2014 proposed to buy Time Warner Cable in a $60-billion deal, and buy privately held Bright House for $11 billion.
The merger between Charter, Time Warner Cable and Bright House Networks would create the second-largest cable TV company and Internet service provider, and the third-largest pay TV provider, in the US, with more than 23 million customers.
''The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet,'' Tom Wheeler, chairman of the FCC, said in a statement.
Charter Communications is held 27 per cent by John Malone's Liberty Media.
Malone, known as ''The King of Cable'', built a small Denver cable company into the into the US' largest system in the 1980s.
Malone, 72, wants cable companies to grow larger to allow them to take on content owners such as Walt Disney, Twenty-First Century Fox Inc and others, who increasingly squeezing cable and satellite for higher fees at the expense of their margins.
Analysts point out that the Charter Communications' offer for Time Warner Cable would be one of the media industry's largest merger deals.