FCC Officially Approves Merger to Create 'Price-Gouging Cable Giant'
Open internet advocates warn that the acquisition will only send cable prices skyrocketing and hurt low-income communities
The Federal Communications Commission (FCC) has approved a $90 billion merger between three telecom corporations, a move that consumer advocates warn will create a "price-gouging cable giant."
According to FCC chairman Tom Wheeler, the conditions of Charter's acquisition of Time Warner and Bright House Networks will include data caps for broadband customers and fees for online services, including for video providers.
Charter now rivals Comcast in size, and together the companies will be offering services to 80 percent of U.S. households, open internet advocacy group Free Press noted. Without any legitimate competition, that means Charter will be able to charge customers whatever it wants. And because the merger gives the cable giant so much market power, the remaining smaller companies will be forced to raise their prices as well.
In short, the merger means no one is safe from skyrocketing cable costs.
Net neutrality advocates slammed the merger as a "wasteful and costly" endeavor that thwarts Wheeler's purported mission to improve competition online.
"This wasteful and costly merger undermines Chairman Wheeler's oft-stated priority of competition, competition, competition," said Craig Aaron, president and CEO of Free Press, which said it would continue to fight against the 'corporate gatekeepers' of the internet.
"It hands far too much control over the internet's future to a cable giant with the incentive and capability to gouge its customers with higher and higher prices," Aaron said. "It gives cable monopolists like Charter and Comcast the power to throttle the nation's burgeoning video market and stifle innovation at the edges of the network."
The official approval, which has been percolating since late March, comes despite a concerted effort by consumers who filed more than 300,000 public comments to the FCC opposing the merger, warning that it would impede quality of life for internet users and consign low-income households and communities of color to "hard choices about basic necessities," as Aaron said.
And Free Press senior director of strategy Tim Karr explained in a blog post published Thursday that "Charter will need to hike prices to pay down the nearly $27 billion in new debt it took on to complete its merger. That’s a burden that amounts to more than $1,000 per average Charter customer."
"Americans want more choices for open and affordable broadband connections," he said. "High-speed internet access is essential for anyone seeking to improve their educational opportunities, participate in politics, seek out health care, do their job, or fine a new one. Yet there's nothing about this massive merger that will make meeting these vital needs any easier."
"Nothing in the reported conditions will lower those prices for the people these rate hikes will hit the hardest: low-income households, people of color, and other underserved communities. Families will be forced to make hard choices about basic necessities, and getting online will be impossible for far too many."
Karr continued: "Pricing low-income communities out of the promise and potential of a high-speed Internet connection only perpetuates the sort of systemic discrimination that further pushes many to the edges of society."