Charter, Cox and Deal Proponents Blast Petition to Deny

Charter needs to purchase Cox to be able to draw customers in a highly competitive marketplace while both face declining broadband and video subscribers, their joint filing said. “The Transaction will yield operating synergies and low prices that benefit consumers. Petitioners’ claims to the contrary rest on a misperception of the marketplace.” If the combined company acted as a “gatekeeper” and raised its prices, consumers “could readily punish the combined company for price increases by shifting to FWA [fixed wireless access], satellite, or fiber competitors,” the MVPDs added.

Several commenters argued that the petition ignored the competition that Charter and Cox face. It “goes to unsupportable, extreme lengths to claim that there are not sufficient marketplace checks in place,” said the Free State Foundation. “Cable broadband providers have been shedding subscribers steadily for the last several years” to satellite, fiber and mobile providers.

“By pooling their resources, Charter and Cox would be more robust competitors to heavy hitters like AT&T, Verizon, T-Mobile, DirecTV, and other companies in various markets,” said the Competitive Enterprise Institute. “In light of the market’s healthy competitive pressures, to impede the combining of Charter and Cox’s resources would be to block a constructive market response to innovation.” Charter and Cox said the petitioners’ claim “that FWA ‘is not expected to meaningfully rival fiber-optic broadband in competitive conditions’ is belied by marketplace realities and agency precedent.”

The petition to deny also relied on bad information, said the Progressive Policy Institute. While arguing that Charter didn’t treat low-income communities fairly, the petition cited a 2022 study that used a small sample that may not have been random, the institute said. “As a result, there is no statistical reason to trust its conclusion.”

Arguments in the petition that the combined company would be able to manipulate interconnection practices to extract fees from or shift costs to ISPs are “unfounded,” said a filing from New York Law School’s Advanced Communications Law & Policy Institute. There have been “few if any” examples of ISPs using interconnection that way in recent years. In addition, Charter and Cox’s service areas largely don’t overlap, the filing said. “Because the merger would not lead to significantly less head-to-head competition between Charter and Cox, few of the current Cox service area consumers will be left with one fewer option in their market for the services Cox provides.”

The Center for American Rights (CAR) took aim at the petition's arguments for conditions related to digital equity. “The DEI [diversity, equity and inclusion] mentality has reached broadband access as much as any other sector of society -- now advocates like CWA wield ‘digital equity’ as the new cudgel to force companies to adopt the advocates’ preferred economic behaviors,” CAR said. The FCC should “not let concerns about ‘digital equity’ stand in the way here.”

Several civil rights groups also filed in support of the Charter/Cox deal, though apparently for the opposite reason. The combined company will help deliver “equitable access” and “strengthen community investments that help close both the affordability gap and the digital readiness gap,” said the League of Latin American Citizens. In a joint filing from ALLvanza, Hispanic 100 and the Latino Coalition, the groups said they “advocate for smart policies that promote deployment of broadband to all communities, rural and urban alike, and that are sensitive to the unique obstacles faced by underserved communities.”

CAR and other commenters said that while CWA requested labor-related conditions on the proposed Charter/Cox combination based on past practices at the companies, the FCC shouldn’t impose any. CWA also said it opposes any conditions that don’t directly address harms flowing from the transactions, CAR noted. “Of course, nothing about the CWA’s complaints of past labor practices at Charter or Cox is transaction specific,” and labor complaints are the province of the National Labor Relations Board rather than the FCC.

Charter and Cox agreed in their joint filing that the FCC shouldn’t consider jobs in its merger review. “In straining to portray the Transaction in a negative light, Petitioners make several unsupported and spurious claims regarding employment and labor issues,” they said. “Aside from the fact that these assertions are completely unfounded, they are beyond the scope of the Commission’s review.”