FCC Republican votes against Charter-Time Warner cable merger

The senior Republican on the Federal Communications Commission voted Thursday against approving Charter Communication’s purchase of Time Warner Cable, citing conditions placed on the merger by agency Chairman Tom Wheeler.

Commissioner Ajit Pai cast his vote on Thursday afternoon using the commission’s electronic voting system.

{mosads}“The FCC’s merger review process is badly broken,” said a Pai spokesperson, explaining the vote.

“Chairman Wheeler’s order isn’t about competition, competition, competition; it’s about regulation, regulation, regulation,” the spokesperson added. “It’s about imposing conditions that have nothing to do with the merits of this transaction. It’s about the government micromanaging the internet economy.”

Pai’s decision to vote against approving the purchase steps up his criticisms about how the agency, which is tasked with determining whether mergers are in the public interest, vets deals under Wheeler.

But his vote is unlikely to keep the deal from going through.

Several news outlets reported on Thursday that both Democratic Commissioner Jessica Rosenworcel and Republican Commissioner Michael O’Rielly would approve the underlying deal. Combined with Wheeler’s vote, that would be enough to secure approval for the merger.

Wheeler recommended last month that the commission approve Charter’s roughly $88 billion purchase of Time Warner Cable and smaller operator Bright House Networks with a set of attached conditions.

The combined entity will be forbidden from charging broadband customers more based on how much data they use or capping the amount of data they can access. Internet service providers have been experimenting with that model in recent years as consumers’ data use skyrockets thanks to streaming video services like Netflix and Hulu.

Wheeler says that those and other conditions placed on the merger by the proposed FCC order, like forbidding so-called interconnection agreements, would remove “unfair barriers to video competition.” Those conditions could be in place for as long as seven years.

The Department of Justice will also enforce conditions related to the new corporate entity’s cable television service as part of its approval. The companies are still waiting on approval from regulators in California.

Pai has been critical of Wheeler’s approach to merger reviews in the past, accusing him of using the process to push policies.

He approved of AT&T purchase of DirecTV but dissented when it came to the conditions the commission placed on the deal.

“These conditions are the forced tribute that the company must offer to mollify the Capitol,” he said. “Some conditions are nothing more than policymaking through the merger review process.”

But critics of the merger deal say the conditions don’t go far enough. A coalition of businesses and public interest groups who are skeptical of the merger met this week with Democratic Commissioner Mignon Clyburn and advisers to Rosenworcel to argue that the commission should do more.

Specifically, they want the company to be required to offer broadband service on its own, meaning that customers would not need to subscribe to the company’s other offerings in order to get internet service. They also want stronger conditions on media diversity.

A spokesperson for Charter declined to comment. An FCC spokesperson directed The Hill to Wheeler’s statement announcing his recommendations for the merger.

Charter’s deal with Time Warner Cable and Bright House is only the latest merger attempt in recent years in the pay-television market as longtime players grapple with the growth of online video.

Comcast famously dropped its own bid for Time Warner Cable under scrutiny from Wheeler’s FCC and the Department of Justice last year. But the commission approved AT&T’s purchase of DirecTV last year, giving the telecommunications company a deeper foothold into the television market, and this week approved the purchase of Cablevision by European firm Altice. 

This story was updated at 4:29 p.m.