Regulator restrictions on Charter to grant approval of its $88 billion takeovers of Time Warner Cable and Brighthouse are a win for online video companies like Netflix and for content companies generally, an analyst said Tuesday.
“The conditions thwart brute-force measures a cable company like Charter could use to stifle growth of online video services and their ability to license content from suppliers that also provide content to Charter,” FBR analyst Barton Crockett wrote.
Monday, the Justice Department and Federal Communications Commission conditionally approved Charter’s takeover of Time Warner Cable and Bright House Networks, saying that rules crimping the cable giant would harm online video companies’ access to content.
Without such restrictions, the deals — which the DOJ valued at $78 billion to take over Time Warner Cable and $10.4 billion to acquire Bright House — could embolden Charter to force programmers into terms that limit how much their content is distributed online, the department said.
Crockett said Tuesday that the while the rules apply only to Charter, the government clearly wants to extend them to all players, which may act as a “soft constraint” against companies not bound by the rules.
Specifically, the DOJ prohibits Charter from setting licensing terms with programmers that would limit the content deals they make with online services. Although the language “appears in some respects hedged and
potentially subject to a legal challenge,” it’s intent is clear, Crockett said.
“This administration appears to want to ensure SVOD services like Netflix have an unfettered ability to license popular content. The
populist roots of this stance suggest it could be sustained into the next administration,” he wrote.
The FCC barred measures such as charging for online-media companies for peering or interconnection, capping customers’ data consumption or setting usage-based pricing.
Last year, Comcast’s bid to buy Time Warner Cable collapsed when the FCC and the Justice Department indicated they would fight the deal. That followed public sqaubbling among the cable industry and companies like Netflix over issues like interconnection and peering, as well as an outcry over Net Neutrality, the concept that all traffic on the Internet should be treated the same.