Media consolidation critic Sen. Al Franken (D-Minn.) wrote the FCC and Department of Justice Tuesday (May 26) on the news that Charter had made a $78.7 billion bid for Time Warner Cable, asking the FCC to keep its fine-tooth comb ready.
“I have long been concerned about the effects of consolidation in the telecommunications industry on American consumers,” wrote Sen. Franken. “Any deal of this size and scope warrants scrutiny. For my part, I will be examining this deal in the coming weeks, and I urge the [Federal Communications Commission] and the [U.S. Department of Justice] to look closely at the consequences for American consumers in terms of competition, pricing, and choice in telecommunications services.," he wrote.
Franken did not say he opposed the deal, a reluctance he did not show with Comcast's effort to by TWC, but did say he would be looking at it closely, and suggested it if were to get through, it should likely only be with strong, enforceable conditions.
The full text of his letter is below.
Dear Chairman Wheeler and Attorney General Lynch:
I ask that you carefully review Charter Communications’ proposed merger with Time Warner Cable (TWC) and acquisition of Bright House Networks (BHN) to determine whether these transactions are in the best interest of the American people and do not have anti-competitive effects. I have long been concerned about the effects of consolidation in the telecommunications industry on American consumers. Any deal of this size and scope warrants scrutiny.
For my part, I will be examining this deal in the coming weeks, and I urge the Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ) to look closely at the consequences for American consumers in terms of competition, pricing, and choice in telecommunications services. To protect the American people, it is essential that regulators thoroughly examine the proposed deal and, if allowed to proceed, consider the need for strong and enforceable consumer protections to guard against any anti-competitive effects and to promote the public interest.
As the industry now stands, “New Charter” would be the second largest multichannel video programming distributor, with 17.3 million video subscribers, and it would control up to 30 percent of the broadband market under the recently updated standard for high-speed Internet service (i.e., requiring a minimum download speed of 25 Mbps). In the companies’ joint announcement today, they stress that their combined scale would allow “New Charter” to provide improved telecommunications services at more competitive prices. They further commit to expanding and improving access to broadband Internet for low-income customers. In assessing the promised benefits to consumers, the FCC and DOJ should consider the companies’ current practices, the competitive landscape and their incentives to serve the public interest post-transaction, and the extent to which the new company could be held accountable for its stated commitments.
With only a handful of cable and Internet companies currently controlling the market, the burden is on Charter Communications, TWC, and BHN to prove that this proposed deal and further concentration of the industry would affirmatively benefit consumers. Those with an interest in combining these companies must demonstrate that their combined scale will lead to increased affordability, quality, and expansion of telecommunications services for consumers across the nation.
As always, thank you for your attention to this matter.