Charter Seeks End to FCC’s Interconnection Condition

Also wants freedom to institute data caps and experiment with pricing options

Charter is asking the FCC to terminate its Time Warner Cable/Bright House deal interconnection condition next year–May 18, 2021–two years early in light of the “dramatic” changes in the online video marketplace. 

The 2016 conditions were for seven years, but the FCC anticipated such a posible early termination given that it could not anticipate where the competitive market would be that far out. 

Currently, Charter must “offer to interconnect its IP network to any qualifying entity free of charge and on standardized terms.” 

The company provided pages of stats and examples to buttress its argument that over-the-top video will do just fine if Charter is given control of its interconnection deals. 

“[T]itans of the video industry, such as Disney and HBO, have begun shifting their programmatic efforts to focus on online delivery,” it said. “By every metric imaginable, OVDs are seeing record-breaking growth and gains across all performance indicators, including in the number of subscribers, the number of OVD platforms, streaming hours, revenue, and the amount and success of original content on these,” it told the FCC. 

“The seven-year term for the Conditions was a ceiling, included to allow the OVD market ‘room to become more mature and better positioned to withstand attempts by New Charter to impose data caps and UBP at levels indeed to blunt their competitiveness,” it pointed out, adding that the five-year early out trigger was included given that the OVD market might mature before that. at the OVD “[I]ndeed, the OVD marketplace has flourished in the four years since the merger closed, it said. “In fact, far from seeking to harm OVDs, Charter, like many other established broadband providers, is actually actively working to increase its subscribers’ access to online video services. Eliminating these Conditions at the end of five years will therefore advance, rather than thwart the competitive gains that have been made, giving Charter the flexibility it needs to best meet the data usage needs of all of its subscribers and to configure its network to deliver data in the most efficient way possible.” 

Netflix, which had opposed the eventually-scuttled merger of Comcast with Time Warner Cable, supported the Charter-led merger after Charter agreed to extend “settlement-free’ interconnection the systems it would be acquiring from TWC and Bright House. Netflix reluctantly entered paid interconnection deals with Comcast, TWC, AT&T and Verizon Communications while arguing that they violated network neutrality rules. 

Charter also wants a similar early exit from its “no data caps or usage-based pricing” conditions. The company points out the FCC had said at the time it would entertain such early exits if the marketplace had changed sufficiently. 

Charter says it definitely has and petitioned the FCC for the changes. 

The FCC said the conditions were to insure that Charter could not “hamper or prevent its current and future online video rivals from expanding, becoming more competitive, or startingup in the first place.” 

Charter suggests those rivals hardly need protection from the company given that its rival ISPs have not had similar conditions and the OTT marketplace has flourished.