The US’ National Association of Broadcasters (NAB) has called upon the FCC to suspend its review of Charter Communications’ planned takeovers of Time Warner Cable and Bright House Networks until it completes a long-delayed review of broadcast ownership rules.
The US’ National Association of Broadcasters (NAB) has called upon the FCC to suspend its review of Charter Communications’ (NASDAQ:CHTR) planned takeovers of Time Warner Cable (NYSE:TWC) and Bright House Networks until it completes a long-delayed review of broadcast ownership rules.
The association argued in a petition filed with the FCC that if it does not reform broadcast ownership rules – some of which are more than 70 years old – to better reflect the current market, it should deny the proposed merger.
NAB president and CEO Gordon Smith (pictured) derided the FCC for “repeatedly fail[ing] its congressional mandate to review and update broadcast ownership rules while, on the other hand, approving massive consolidation among pay-TV providers”.
“The commission should fulfil its statutory obligation so it can better factor in the effect another combination of behemoth cable companies will have on local broadcast stations and the millions of viewers who rely on our service,” Smith said.
The FCC is required under the Telecommunications Act 1996 to review broadcast ownership rules every four years. The commission decided to combine its 2010 and 2014 reviews and has scheduled them for completion in 2016.
NAB argued that the consolidation of the pay-TV industry had put local TV stations at a competitive disadvantage and that outdated broadcast ownership rules have prevented broadcasters from achieving the same economies of scale.
“That industry will only become more concentrated through the proposed merger to combine the fourth, seventh and tenth largest multichannel video programming distribution [entities] in the country,” it said.
Charter agreed to buy TWC and Bright House Networks for US$56bn and US$10.4bn respectively in late May. If approved by regulators, the deal will create the country’s second largest cableco behind Comcast.
Charter has previously said it expects to close the deals by the end of the year, although some analysts think an early 2016 completion looks more likely.
The FCC declined to comment on the NAB petition.