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Polka Pans Charter/TWC Overbuild Condition

The American Cable Association is not happy with the FCC's overbuild condition in the Charter/Time Warner Cable merger, which means some of its members could face competition from the newly enlarged company.

The FCC included a condition on building out to an additional 2 million residential homes. Though it prefaced that by citing a Charter pledge to build out to "unserved areas, it is requiring Charter to go further and build out at least a million of those in areas where at least one other broadband Internet access service (BIAS) is providing at least 25 Mbps downstream advertised service.

Broadband competition is one of the FCC's prime directives under Chairman Tom Wheeler.

Some deal watchers saw that as a condition targeted to generating competition between Charter/TWC, now the number two BIAS provider with number one provider, Comcast, but ACA sees its members as likely objects of the overbuild.

“Such harm to smaller providers and their customers is very likely because new Charter, using its significant scale advantages made possible by the FCC’s approval, will have an economic incentive to choose locations served by smaller providers because Charter can most easily drive them out of the market, leaving Charter as the only provider," ACA President Matt Polka said after the FCC released the order detailing the deal conditions. "The condition lacks limitations on the locations that count toward meeting the obligation, such as those that are most in need of competition or served by other large Internet Service Providers."

Polka says the condition will harm consumers by preventing Charter from investing where it is most efficient, upgrading current networks to higher speeds, for example.

ACA says the buildout condition should have been targeted to areas "where prices exceed those offered in urban areas and network performance failed to meet the FCC’s benchmarks."

The FCC has set 25 MHz as high-speed table stakes.