ACA Warns Charter Build-Out Condition Could Discourage Small Provider Investment

March 14, 2017–The FCC should “act in consumer’s best interest” and eliminate the residential build-out condition the agency imposed last year on its approval of Charter Communications, Inc.’s acquisition of Time Warner Cable, Inc., and Bright House Networks, according to an ex parte that the American Cable Association filed today on behalf of 38 small and mid-sized broadband service providers. FCC Chairman Ajit Pai circulated a draft item to accomplish that change at the end of the February by altering the condition so that all of the two million locations covered by the condition could be previously unserved, rather than requiring that one million of the build-out locations be overbuilds (TRDaily, Feb. 24).

“Based on our experience and knowledge of the industry, we expect Charter to fulfill that overbuild condition through edge-out expansion to locations primarily served by a small broadband provider. These are markets that we would not expect Charter to otherwise enter, including markets that might not support two providers,” the providers said in the letter submitted by ACA.

“For small providers like ourselves, the mere threat of government-mandated, uneconomic entry undermines our ability to make investments that would benefit existing subscribers (e.g., investments in service improvements, network upgrades, etc.) or expand our networks to reach unserved households. To respond to growing consumer demand for increased bandwidth, all of us have been planning to upgrade the electronics on our networks and to deploy more fiber closer to customer locations over the next five years (the lifespan of the overbuild condition). Many of us have been planning to extend our networks to serve communities adjacent to our current service territories. But we have been forced to reconsider, scale back, or halt these investments in the wake of the Commission’s order,” they added. —Lynn Stanton, lynn.stanton@wolterskluwer.com

Courtesy TRDaily