The Department of Justice and the chairman of the Federal Communications Commission approved Charter Communications’ $78 billion takeover of Time Warner Cable and its $10.4 billion purchase of Bright House Networks. The government agencies included multiple conditions to the actual approval, however and the full FCC still needs to cast their ballot in order to accept chairman Tom Wheeler’s suggestion. Regardless, the vote is understood as a formality in this case.
Once the deal is secured, Charter will stand next to other tech sector companies like Comcast, AT&T, and Verizon as a media juggernaut molding the future of television-watching and web-surfing. “We are pleased to reach this critical step in the regulatory review of our merger with Charter,” said Time Warner Cable CEO Rob Marcus, “and remain optimistic that the transaction will be finalized soon.”
The entire arrangement was drawn up almost a year ago, after Comcast’s bid to combine with Time Warner Cable fell apart based on the strong stance that Washington took on the transaction, in opposition of it. This time the same regulators were more supportive of Charter’s bid for Time Warner Cable — but again there were important caveats.
Charter will not be allowed to put data caps in place or sharge customers based on usage, the two agencies said in a statement on Monday. On top of this, the company will not be able to charge internet content providers fees for connecting them to customers. These conditions will apply for a period of seven years in order to “focus on removing unfair barriers to video competition,” the statement said.
Charter’s CEO, Tom Rutledge, will handle the enlarged company. He first had thought the deal would be approved by the end of 2015, but the process has taken quite some time. Now Charter is targeting a mid- to late-May completion date. Along with the FCC vote, the company still needs approval from the California’s Public Utilities Commission. A vote is scheduled for May 12.
“We are pleased that Chairman Wheeler has submitted the proposed conditions for consideration by the full Commission and that the DOJ has submitted its agreement for approval by the court,” Rutledge said in a statement.
“The conditions that will be imposed ensure Charter’s current consumer-friendly and pro-broadband businesses practices will be maintained by New Charter,” he said.
The deal will affect one in six American households and Charter is expected to retire, or at least downplay, the Time Warner and Bright House brand names. Charter already promotes its products with the brand name Spectrum, and it will be extending that name to its new markets. This take-over could soon become a major catalyst to echo across the technology space to make 2016 Technology Stocks a thing to watch