Charter Acquires Time Warner Cable, Promises It Will Suck Less Than Blocked Comcast Merger

from the Godzilla-eats-Mothra dept

Driven by the relentless M&A lust of company chair and cable industry mainstay John Malone, Charter Communications has announced that the company will be spending $55 billion to acquire Time Warner Cable. Malone and Charter had been pursuing Time Warner Cable for two years, but found their ambitions blocked when Comcast made a better offer. With Comcast's merger attempt blocked by federal regulators, Charter got a second chance. The deal was accompanied with the usual assortment of prepared CEO statements promising that this merger will surely be the one that magically makes the cable industry suck less:

"The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry...That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies," said Tom Rutledge, President and CEO of Charter Communications. "With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices."

"With today's announcement, we have delivered on our commitment to maximizing shareholder value," said Robert D. Marcus, Chairman and CEO of Time Warner Cable. "This agreement recognizes the unique value of Time Warner Cable, and brings together three great companies that share a common philosophy of strong operations, great products, robust network investment and putting customers first."

Yes, putting "customers first" is surely why Time Warner Cable has the worst customer satisfaction rankings not only in telecom, but in any U.S. industry. In fact, it's exactly the cable industry's relentless love for mergers and acquisitions that has resulted in cable operators growing so quickly, they're unable to scale their customer service systems accordingly. Meanwhile, the lack of competition in many markets means there's little incentive to actually improve, and any cost savings from greater size and leverage certainly won't be passed on to consumers. Combine that with the job losses as companies eliminate redundancies, and you've generally got deals that benefit nobody outside of Wall Street.

While this deal probably won't improve much of anything for cable customers, it's generally agreed that it's not as horrendously awful as the Comcast merger -- simply because the combined company won't have quite the same programming and advertising clout as mega-Comcast would have had. Comcast itself sent a short, two-sentence statement to the media saying the deal makes "all the sense in the world" (you know it must be good if Comcast signed off on it). In fact, reports suggest FCC boss Tom Wheeler personally called the heads of Charter and Time Warner Cable to assure them their deal would likely be approved.

That said, it's still a massive deal. In addition to acquiring Time Warner Cable for $55 billion, the combined company will also be acquiring the nation's sixth-largest cable operator: Bright House Networks, for an additional $10.3 billion. The new, combined company will serve 23.9 million customers in 41 states, and become the second largest cable operator in the nation behind Comcast. Surely it's this merger that's going to prod the cable industry to offer the kind of "competitive prices," "state-of-the-art video experiences" and excellent customer service we've all been waiting for, right?

Filed Under: broadband, customer service, mergers, net neutrality
Companies: charter, comcast, time warner cable

AT&T Argues Net Neutrality Violates Its First Amendment Rights

from the up-is-down,-black-is-white dept

Back when Verizon sued to overturn the FCC's 2010 net neutrality rules, the telco argued that the FCC was aggressively and capriciously violating the company's First and Fifth Amendment rights. According to Verizon's argument at the time, broadband networks "are the modern-day microphone by which their owners engage in First Amendment speech." Verizon also tried to claim that neutrality rules were a sort of "permanent easement on private broadband networks for the use of others without just compensation," and thereby violated the Fifth Amendment.

Granted, any well-caffeinated lawyer in a nice pair of tap dancing shoes can effectively argue anything, though in this case you'd obviously have to operate in a vacuum and ignore the history, context and definition of net neutrality to fully do so. Regardless, Verizon did manage to have those original, flimsy rules thrown out, but it had nothing to do with the telco's Constitutional arguments. Verizon won because the FCC was trying to impose common carrier rules on ISPs without first declaring them as common carriers under Title II of the Communications Act, something the FCC tried to remedy with the latest rule incarnation.

Fast forward to 2015. AT&T's busy suing the FCC both as part of USTelecom, but also with a standalone lawsuit of its own. In a statement of issues (pdf) outlining its legal assault on the FCC's net neutrality rules, AT&T makes it clear that it too will try to claim the FCC is violating the company's First and Fifth Amendment rights:

"In a statement of issues that AT&T intends to raise when the case moves further into the court process, the company said last week that it plans on challenging whether the FCC’s net neutrality order "violates the terms of the Communications Act of 1934, as amended, and the First and Fifth Amendments to the US Constitution." The First and Fifth Amendment will be used to attack the FCC's decision to reclassify both fixed and mobile broadband as common carrier services, as well as the FCC's assertion of authority over how ISPs interconnect with other networks."

CenturyLink, wireless carriers (the CTIA) and major telcos (USTelecom) have stated they plan to argue the same point, though the precise legal approach obviously isn't being disclosed yet. Basically, AT&T and friends are throwing every legal claim they can possibly think of at the wall and hoping something sticks.

Leaning on the First Amendment when it's convenient has long been a telecom lawyer mainstay, logic be damned. Verizon tried to argue that its participation in the government's domestic surveillance efforts was protected by the First Amendment. Comcast has tried to argue that its right to bar competitors' TV channels from its lineup is similarly protected by the First Amendment. Charter Communications has hinted it believes its First Amendment rights mean it doesn't have to adhere to municipal franchise contracts. Of course, those of us here on planet Earth realize net neutrality is intended to protect the free speech rights of consumers and small business owners from the incumbent ISPs, and the only concept truly being explored here is irony.

Filed Under: fcc, first amendment, free speech, net neutrality
Companies: at&t