Charter is the Most Friendly Operator to OVDs

After months of review, our transactions with Time Warner Cable and Bright House Networks continue to receive positive feedback. Last week’s approval by the New York PSC was the latest clear sign of momentum for the merger. Today, our CEO Tom Rutledge and the nation’s leading multicultural organizations – including the National Urban League, Asian Americans Advancing Justice, and the League of United Latin American Citizens – signed a memorandum of understanding with specific commitments regarding how New Charter will expand diversity and inclusion.

The regulatory approval process for transactions like this is a deliberative process and rightfully so.  We understand the importance of demonstrating why the transactions are in the public interest, which is why we continue to engage with regulators, stakeholders and the public about the benefits New Charter will bring to customers – including fast unlimited broadband, increased buildout, a commitment to the Open Internet and innovative video services and 20,000 new jobs, including thousands of jobs brought back to the United States.  We have made legally enforceable commitments

We are happy to report that the vast majority of stakeholders are pleased with the merger and excited about New Charter.  It’s no surprise, though, that there are some who seek to use the regulatory review process to extract concessions or conditions that further their business goals.  Following the well-worn play book, to achieve that goal, they must first try to discredit the merger, but their allegations are often not based on the facts. For example, charges by Dish and Time Warner’s HBO that New Charter will harm Online Video Distributors simply do not make sense. As we have demonstrated, there is no more OVD-friendly provider than Charter, with our slowest speed at 60 Mbps, no data caps, no usage-based billing, no annual contracts and no modem fees. Additionally, we’ve committed that New Charter will offering settlement-free peering to Internet companies, which means we will continue to invest in interconnection to avoid congestion. Netflix CEO Reed Hastings, a supporter of the transaction, stated “the key thing about the Charter deal is it’s all Internet companies that benefit — us, Hulu, Amazon, HBO Now — so that we can all compete for consumers’ affection.”

Charter CEO Tom Rutledge in his own words:

Goldman Sachs Communacopia 10/16/15: “We want to have a good broadband business and a connectivity business. And so we’ve invested in that capability. That makes our network more useful to people who buy Netflix, right, or other over-the-top providers. And we want them to subscribe to us as opposed to another network. So, Netflix is our friend, they drive broadband. And why do the drive all video, the richer the video package, the better off our network is relative to our competitors, in the eyes of the consumer. So we want — our minimum speed that we go to market with is 60 megabits. Well, in order to enjoy 60 megabits, you have to use video or some rich gaming platform in order to actually understand the value of the product.

So in order to use a superior broadband proposition in the market, ultimately, customers have to have some sense of value out of superiority of your broadband network. And the only way they’re going to get that is to have a rich over-the-top environment. So we embrace over-the-top television, because it makes our broadband superiority more clear in the eyes of the consumers.”

CNBC interview Squawk on the Street 11/12/15: “We like over the top television because it makes our broadband product look better. We like it because it pressures the price of video. Obviously, if consumers are unwilling to pay for video at a certain price, we’re unwilling to pay for that as well. So our cost structure is positively impacted by over the top.”