Dish Network, a strong opponent of the proposed Charter-Time Warner Cable merger has recommended approval conditions to the FCC, seeking a requirement that post-merger Charter offer a standalone broadband service that will ensure online video services (like Dish Network's Sling TV) are competitive against Charter's legacy subscription video packages.
The condition has already been discussed with FCC staff. Dish Network's filing suggests the specific components of the condition were proposed, at least in part, as a response to FCC input. Dish Network's filing was made this week, suggesting that the company recognizes the deal will likely be approved and that final requests for conditions must be proposed and vetted immediately.
The Commission's informal shot-clock for reviewing the merger expired in late March. Because California regulators are not scheduled to finalize their review of the transaction until May 12, the additional time taken by the FCC and the Justice Department to complete their evaluation is not preventing the closing of the deal. But we believe the Commission should be ready to vote on a circulated proposed order in the days ahead.
Dish Network recognizes that a simple mandate for a standalone broadband service will not protect its OTT (over-the-top) video market opportunity unless additional restrictions prevent discriminatory bundling and pricing practices. Accordingly, Dish wants the Commission to adopt a requirement that the standalone broadband offering (of 60 Mbps downstream) be comparable to what Charter offers in its bundled service offerings and be offered at a competitive price independent of the bundle. Dish is concerned that Charter will offer a discounted broadband-video bundle that diminishes or forecloses the market opportunity for OTT linear video alternatives offered by Dish and other emerging providers.
The anticipated FCC approval order will likely impose conditions addressing a range of issues, including net neutrality enforcement (despite the outcome of the upcoming court decision), access to regional sports networks, upgrades and expansion of broadband network capabilities, and affordable options for low-income subscribers. The duration of conditions (Charter has offered an initial three-year commitment) is another issue and the final order will likely add a few more years to the respective mandates.
As we've noted before, the preservation of independent OTT video growth and innovation remains the Commission's primary policy objective in the merger review. We expect, for example, conditions that would guard against unreasonable agreements or practices that discourage the migration of video to unaffiliated OTT platforms. Dish Network's proposed standalone broadband condition is consistent with the FCC's broader agenda.