The Republican-led Federal Communications Commission has relaxed a requirement intended to spur competition that the previous administration had placed on Charter Communications.
During last year's regulatory review of Charter's acquisition of Time Warner Cable, the FCC ordered Charter to significantly expand the availability of high-speed Internet service. As part of the order, the cable company agreed to build an additional 2 million Internet service connections within five years — including 1 million new connections in regions served by other cable providers. The FCC's goal was to increase competition by introducing a new Internet provider in some markets.
But on Monday the FCC, in a unanimous vote, lifted the provision that required Charter to expand into a competitor's service area. Small cable operators had complained the merger condition would harm them, making it harder to compete against giants such as Charter.
"This condition was not and is not in the public interest, and it runs directly against the goal of promoting greater Internet access for all Americans," FCC Chairman Ajit Pai said in a statement announcing the change, which was approved by the three sitting FCC commissioners, including Mignon Clyburn, the lone Democrat.
Charter remains on the hook to provide connections to 2 million new locations. But by modifying the merger agreement, the FCC signaled that it wanted Charter to focus its expansion on rural areas that currently lack high-speed Internet service. "The beneficiaries will be consumers currently on the wrong side of the digital divide," Pai said.
Charter, based in Stamford, Conn., applauded the FCC action, saying it would enable the company "to more fully devote our resources and attention to building out high-speed broadband to areas without it today."
There are pockets in Southern California, including in rural parts of San Bernardino, Imperial and Kern counties, where high-speed Internet service is not available. With its takeover of Time Warner Cable, Charter became the largest Internet service provider in Southern California.
Consumer activists on Monday criticized the FCC's vote to relax the requirements on Charter, noting that it was unusual for the FCC to change merger conditions and that the broadband industry needs more competition.
"Consumers need protection — whether through clear government rules that ensure providers do not take advantage of their privileged position, through competition between providers, or some combination," Public Knowledge senior counsel John Bergmayer said in a statement.
"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.
3:15 p.m.: This post was updated to include additional details on the FCC vote.