Regulators Recommend Approval of Charter-Time Warner Cable Deal

Federal regulators moved to approve Charter Communications Inc.'s $55 billion acquisition of Time Warner Cable Inc. but said the combined cable giant would have to live under several stringent conditions that single it out among industry rivals.

In separate statements, the Justice Department and Federal Communications Commission Chairman Tom Wheeler said the conditions would mitigate threats to online video competition posed by the merger, which will create the second-largest cable company, serving more than 17 million video customers.

Mr. Wheeler is expected to circulate a draft order to the four other FCC commissioners, and the matter is expected to be voted on in coming days.

As part of the package of conditions, Charter has agreed to build out broadband service to 2 million more homes. One million of those homes will be in markets where Charter will compete with another Internet provider offering the FCC's definition of "broadband" at 25 megabits per second.

That would require some amount of "overbuilding" cable companies, a person familiar the deal said. Historically, cable companies haven't competed against each other in the same geographic areas.

The deal would also require the combined company to swear off data caps and usage-based billing for as long as seven years—a restriction no other broadband provider faces today.

The company also wouldn't be able to charge companies such as Netflix Inc. for so-called "interconnection" deals that govern traffic handoffs between networks for that period. When regulators approved AT&T Inc.'s deal to buy DirecTV last year, they didn't impose a similar ban on "interconnection" fees.

Write to Shalini Ramachandran at [e-mail] and John McKinnon at [e-mail]

(END) Dow Jones Newswires

April 25, 2016 15:55 ET (19:55 GMT)

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