Several consumer groups have asked the Federal Communications Commission to block cable company Charter Communication’s bid to take over Time Warner Cable and the smaller Bright House Networks.
The proposed consolidation, which was announced in May, would catapult Charter into the nation’s third-largest pay-TV provider.
Charter also would provide high-speed Internet service to more than one-fifth of U.S. consumers with broadband. Nationwide, the company would boast more than 19 million broadband Internet customers.
Charter also would be the largest pay-TV company in the Los Angeles region with more than 1.8 million subscribers. It would provide service to more than a third of the pay-TV homes in the Los Angeles market.
“An arms race where consolidation begets consolidation, where constant dealmaking increases the industry’s debt-load, and where cost-cutting takes the place of innovation, is not likely to lead to lower prices, increased diversity of content, or new services for consumers,” John Bergmayer, senior staff attorney with the consumer group Public Knowledge, wrote in his group’s 26-page petition with the FCC.
Tuesday was the deadline for groups to weigh in on Charter’s proposed mergers. Combined, the two deals are valued at more than $67 billion and could transform the pay-TV and high-speed Internet landscape.
Advocacy groups Common Cause and Free Press also expressed their concerns about the proposed consolidation.
“New Charter would emerge from this transaction with a whopping $66 billion in debt, a 70% increase above the total debt currently saddling the three companies involved in this deal,” Free Press policy director Matt Wood said in a statement.
“The parties to this deal have failed to show that it would benefit consumers or enhance competition,” Wood said.
The FCC has the authority to deny the mergers if the agency determines that the deal is not in the public interest.
The FCC was gearing up to block Comcast’s proposed take-over of Time Warner Cable this spring when Comcast abruptly withdrew its bid because it did not want to take on the government.
Charter is expected to have an easier ride. Even with the additional customers, Charter still would be smaller than AT&T and Comcast, the nation’s two largest pay-TV providers.
The FCC in July approved AT&T’s request to acquire DirecTV, which turned the telephone giant into the nation’s largest TV provider.
Spokesmen for Charter and Time Warner Cable declined to comment.