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Charter CEO Explains Why ISP Won't Compete Against Cable

As part of the Charter merger conditions the cable company is required to expand broadband service to 2 million additional locations -- 1 million of which must already be covered by an existing broadband provider offering speeds of 25 Mbps or more. Speaking at the MoffettNathanson Media & Communications Summit this week, Charter CEO Tom Rutledge stated that the company would be fulfilling that commitment by targeting areas served by phone companies -- but not cable companies.

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Why? Because Charter might want to buy those cable companies down the line, and the FCC is less likely to approve deals that would stop two existing cable companies from competing with one another.

"When I talked to the FCC, I said I can’t overbuild another cable company, because then I could never buy it, because you always block those," Rutledge said. "It’s really about overbuilding telephone companies."

The CEO also noted that they're more likely to target phone companies because so many of them are struggling to provide next-generation speeds, whereas the low cost of DOCSIS 3.0 and 3.1 have made next-gen upgrades easier for most cable companies.

"Why would we go where we could get killed?" rhetorically asked the CEO.

Most recommended from 24 comments


shmerl
join:2013-10-21

1 edit

9 recommendations

shmerl

Member

Hrm, what?

The whole point of FCC is to increase competition. And this guy is saying "I want to later reduce it by buying those competitors, so don't force me to do it in places where competition isn't reducable". What is he smoking? I'd say, FCC should require that wherever they'll go as part of these conditions, they should be forbidden from buying competitors.

mixdup
join:2003-06-28
Alpharetta, GA

9 recommendations

mixdup

Member

He's not wrong

The thing is he's not wrong. He can't beat Comcast or Cox or any other cable company with a better product, just the same product. They're all on the same roadmap when it comes to speed and services.

Honestly, the FCC should have mandated that all of his additional buildout be to locations with ZERO options, instead of trying to artificially create competition.