WASHINGTON, April 3 The U.S. Federal Communications Commission voted to reverse a requirement imposed under the Obama administration that Charter Communications Inc extend broadband service to 1 million households that now have service, a source briefed on the matter said. The American Cable Association was prominent in lobbying the FCC to change the rules, saying that the rule would have "devastating effects on the smaller broadband providers Charter will overbuild".
The FCC has reworked one of the key requirements it put on Charter's 2016 merger with Time Warner Cable and Bright House, governing where the massive cable company expands to in the coming years.
In a new order, the newly constructed FCC under the Republican regime with Ajit Pai as its chairman, ordered Charter Communications must provide service to two million additional subscribers in places without existing service.
The reversal on the Charter broadband overbuild condition does not reduce the number of locations to which Charter must bring broadband service, but instead requires the company to build to locations that do not now have broadband available to them, or who have only low-speed broadband.
"It has become clear that forcing New Charter into competing with another carrier, incentivizes the company to overbuild where the weakest potential competition now exists", Clyburn writes in a statement. The FCC's then-Democratic leadership said that "overbuilding" in areas served by only one ISP would bring lower prices and greater choice to consumers. "Given our conclusions about competition in the broadband market, I am concerned that years from now, we will simply end up with still only one entity - New Charter - serving those "overbuilt" areas".
"Consumers already spend about $50 a month more than they would in a competitive market for TV, set-top box and broadband services, and often lack the ability to switch providers if they are unhappy with their service", he said. They had said Charter would have to compete with another fast-internet provider for 1 million customers.
Wheeler said previous year the requirement as part of Charter's acquisition of Time Warner Cable (twc) and Bright House Networks would spur competition.
Charter has not yet commented on the FCC's revised order.
When a merger involves FCC license transfers, the commission is required to review the deal to determine whether it serves the public interest.