Pai Said What About FCC Charter-TWC Conditions?


pai-testifyingFCC Commissioner Ajit Pai issued a scathing dissent to the commission decision to approve the Charter Communications acquisition of Time Warner Cable and Bright House.

Based on the more than 100 pages of the decision in which the agency details “the harms that would allegedly result” from the $78 billion deal, it’s clear the majority don’t believe the transaction is in the public interest, he writes.

The transaction would move what would be called “New Charter” from the fourth-largest cable company in America to number two behind Cox.

So why okay it even with restrictions? Because the agency “has turned the transaction into a vehicle for advancing its ambitious agenda to micromanage the Internet economy,” according to Pai, the senior GOP commissioner. We reported the conditions tie up the new company for 7 year on price, speed and other issues and the commission will monitor how the merged entity complies with the restrictions.

“The Order makes clear the commission’s view that paid peering and usage-based pricing are inherent threats to online video distributors. And if these practices are so harmful that Charter must not be allowed to engage in them, it is only a matter of time before no ISP will be permitted to do so,” says Pai.

The bottom line for Pai is the company’s costs will go up due to the demand of online video on CapX, and IPPs will increase prices for all customers, so those who end up using little bandwidth subsidize the ones who use a lot and that’s not fair. That’s a large part of why he opposes the decision.

Another is the commission process itself which he says is fact-free, non-transparent and politicized, compared to the more straight forward merger review the DOJ undertakes. He knows, because he used to review deals at the DOJ.

Pai called on Congress to reform how the FCC reviews transactions.

RBR+TVBR observation: Pai was the lone total opposing vote. Even his fellow GOP Commissioner, Michael O’Rielly, only dissented in part, objecting to the non-transaction-related conditions.